Sadly Comical

If you read last week's post you know more than 90% of the American public - not all "financial advisors" are the same. 

Quick recap - there's two types of financial advisors:

  1. Registered Investment Advisors (RIA) like The Financial Zen Group, are legally required to put your interests above their own.  (Colloquially referred to as independent financial advisors.)
  2. Registered Representatives of big brokerage/insurance firms like Wells Fargo, Merrill Lynch and Northwestern Mutual don't have the same legal requirement.  They just can't sell you an investment that's not suitable.  (Once upon a time they were called stockbrokers and insurance agents.)

The DoL Fiduciary Rule changed all that…sorta.  As of Friday before last, Registered Reps also have to put your interests above their own. 

That's great news, right?  You probably thought it already worked that way. 

It just makes sense to have all financial advisors everywhere be legally required to put your interests above their own. 

Here's the catch…

…the new, much-talked-about, hotly-debated DoL Fiduciary Rule only applies to retirement accounts!  

So Mr. Big Brokerage Financial Advisor can still sell you the inferior investment that pays him highest commission…just not in your IRA. 

It's sadly comical if you ask me.   But when you mix Wall St. lobbyists with a greedy congress, this is the type of "reform" you end up with. (Although it's at least a step in the right direction.)

You can only do 2 things:

  1. Write you representative
  2. Educate yourself to understand the reality you're dealing with

Hopefully this helped with the latter.