On Friday, the Trump administration issued a memorandum asking the Department of Labor to review the so-called “fiduciary rule” governing retirement savings and investment accounts before its implementation in April of this year. Washington DC and regulation being what it is, for all intents and purposes this indefinitely stays the rule. According to a news release from the DOL’s Acting US Secretary Ed Hugler “The Department of Labor will now consider its legal options to delay the applicability date as we comply with the President’s memorandum.”
It is important to note that, despite a lot of hand-wringing from the press, lobbyists, politicians, financial institutions, investor protection groups and other stakeholders on both sides, the rule had not yet gone into effect, so this step more or less maintains the status quo. While we are hopeful in the long term that legislators, regulators, financial consumers and industry participants will come to terms on an approach to rulemaking which adequately serves the needs of retirement investors and hopefully all investors, our focus is on how those investors are served today.
What we believe is most critical for our clients and partners to appreciate is that fee-based advice provided under a standard of fiduciary care is already widely available. Wilde Capital Management’s business is based on this standard and it drives our investment process and decision-making. We believe client centric advice is critical to this process, conflicts of interest should be addressed and disclosed, and that fair and transparent pricing provides the foundation for long term relationships built on trust. These standards are further bolstered by codes of conduct practiced by industry professionals such as CFA charterholders like our own Jonathan London, CFA, who adhere to the CFA Institute’s Code of Ethics and Standards of Professional Conduct and the Asset Manager Code of Professional Conduct.
The best thing an investor can do is to ask critical questions of WCM or any other financial service provider. If that provider is a Registered Investment Advisor under the Investment Advisers Act of 1940, ask for a copy of the RIA’s Form ADV that discusses the nature and limits of their duties, responsibilities and fees. A quality advisor will also gladly discuss specifics with a current or potential client about services, account pricing, business, marketing and other relationships with product manufacturers, and to what extent they accept fiduciary responsibility for client accounts.