The Department of Labor Fiduciary Rule

Sometimes the rest of the world finally catches up with your thinking. Last week the Department of Labor published a document which explains a new rule that goes into effect on April 10 of this year. (a link to the referenced document is at the bottom of this email, but don’t read ahead 🙂 ) The new rule says that a financial advisor who gives you advice about your retirement account must give that advice in your best interest. Astounding as it may seem, for all eternity before this point, a financial advisor only had to give advice that is “suitable”. It may or may not be in your best interest, would not require them looking at your entire financial picture, it just has to be “ok”. An advisor could recommend an investment for you in your retirement account that was just okay for you, but great for them! They could tell you to move your 401k to their IRA where there were higher fees, and higher commissions – and never tell you. Great for them, not necessarily great for you.

When Wellspring Financial Partners was founded, from the very first day, we registered, legally and in writing, that we would ONLY work in our clients’ best interest. It’s called being a “Fiduciary” and not all financial advisors need to register like this and many are not. The Department of labor is finally catching up to us because the abuse in the industry for families has been so egregious. Rest assured, Wellspring Financial Partners is, has been, and always will be a Fiduciary. We act in our clients’ best interest, we get paid by nobody else, we accept no commissions and serve no other interest or master but our clients.

This new rule will cause a huge set of changes, internal consternation, and protective scrambling for the likes of Bank of America (Merrill Lynch), Wells Fargo, Ameriprise, J.D. Edwards, Schwab, and others who have often been able to take advantage of their clients. But for us, we are just flattered and we could not have said it better than the Department of Labor.


The DOL Document