The United States Department of Labor (DOL) has set forth a new guideline, known as “401,” for investment houses. 401 will make it mandatory that their agents take a fiduciary role with all of their clients’ retirement accounts.
The proposal, which is set to take effect in 2017, will require all investment advisers of individual retirement accounts (IRAs) and 401k’s to take on the the role of a fiduciary and disclose all of the investment fees including compensation to their investors. It will provide transparency.
The administration’s effort to get these changes in effect have taken many years, after much criticism over what the industry had become in the wake of the 2008 financial crisis. Instead of offering their clients solid, financial advice that would benefit their portfolios, the advisers were acting in their own best interests while providing investment services.
The International Business Times recently ran an article that delved into some of the conflicting emotions that advisers experience in the current way of doing business. Terms like “ technically not illegal” and “used car salesman” were used to show the sorts of conflict of interest—or, rather, the lack of any sense of a conflict of interest—present behind the scenes.
The President’s push for regulatory reform through the DOL instead of Congress has not stopped teams of lobbyists from courting influential legislators to tell their side of the story: the proposed regulation goes too far, it will cost too much, investment houses will shut down, etc.
At Via Four Investments, we know that this is not the case because we have always acted as fiduciaries to our clients, whether it be mandated by law or simply behaving ethically—across all of our clients’ accounts. We are fiduciaries through and through. We always have been, and we always will be.
So if you’re going to a professional money management firm, hire a firm that is already a fiduciary on all of your accounts. If it is the right thing to do a year from now, why wasn’t it the right thing to do in the past or now? Investors have a choice, and many of them do not realize it because of huge, focus group-tested marketing campaigns used by the big players to exploit them psychologically—and to come as close as possible to deceiving them legally.
How can anyone feel good about working with a company that only does the right thing when they’re forced to by law? Why not do business with a company that will always do the right thing for you such as Via Four Investments?
Contact us today with questions or comments.