After heated opposition and a two-month delay, the Department of Labor’s Fiduciary Rule became effective June 9, 2017 (with certain documentation requirements applicable on January 1, 2018). This law pertains to any professional who makes investment-related recommendations on employee benefit plans and IRA retirement assets pursuant to an agreement. Legislators hope to educate the public on the meaning of “fiduciary” (to put a client’s best interest first) and to raise awareness of potential advisor conflicts of interest and compensation issues. The law is being promoted as a substantial change to the industry because advisors who were not previously required to act in an investor’s best interest (like broker-dealers) are now legally required to do so for retirement asset accounts.
While this may represent a major shift at other firms, our clients will not experience substantial changes to their investment management or financial planning experience. The three senior partners founded Pinnacle in 1993 to escape commission-based product sales and focus on their clients’ best interest. For nearly 25 years, we have taken a fiduciary approach for all client accounts—and not just in the retirement assets subject to this new law. We have never offered financial advice motivated by commissions-based compensation. Instead, Pinnacle offers comprehensive financial planning to help clients achieve their financial goals while making recommendations only in the client’s best interest, free from misleading statements and in exchange for reasonable compensation. In the second half of 2017, we will enhance our policies, procedures, and internal documentation with respect to those financial recommendations, and will update you as changes come.
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