Like It Or Not, All Advisors Are Now Fiduciaries

My Comments: In my capacity as a financial planner and investment advisor, I’ve long embraced a fiduciary standard. This means I’m bound morally, ethically and legally to do what, in my professional opinion, is in my client’s best interests.

Corporate financial America (Wall Street in general, the insurance industry, money managers, et al) and their shills in Congress have pushed back hard as they don’t want to assume full responsibility for what their salesmen and saleswomen may say and do that is not patently illegal. If it happens to be in their client’s best interest, that’s an incidental benefit. They argue that holding them to a fiduciary standard will increase costs to the consumer. In my opinion, that is self-serving bulls@@t.

On balance, consumers will benefit from an evolution of products and services that serve their interests rather than the interest of corporate America and their shareholders. This is the same standard that applies to Certified Public Accountants, to Attorneys, to Trust Officers, to Certified Financial Planners and a few other categories. It’s long past time for it to apply to all investment advisors and other advice driven financial professionals.

Article by Roccy DeFrancesco on May 29, 2015

Recently the Department of Labor (DOL) put out a set of new proposed regulations that cover advice given to clients who have money in qualified plans and IRAs. Here is a summary of the new regs, which include some stunning fee/commission disclosure language.

Best interest of the client

I find the fact that many advisors are all up in arms about these new regs somewhat comical. Who would argue that all advisors should always give advice that’s in their client’s best interest? Apparently, some B/Ds and Series 7 licensed advisors would make such an argument, and that argument will now fail.

Al advisors are now “fiduciaries,” including insurance agents and Series 7 licensed advisors.

Under DOL’s proposed definition, any individual receiving compensation for providing advice that is individualized or specifically directed to a particular plan sponsor (e.g., an employer with a retirement plan), plan participant, or IRA owner for consideration in making a retirement investment decision is a fiduciary.

The fiduciary can be a broker, registered investment advisor, insurance agent, or other type of advisor.

A game changer?

For three years now, the writing has been on the wall when it comes to insurance agents having to obtain some kind of a securities license in order to avoid regulatory issues with the “source of funds” rule.

There are many in the industry who have advised insurance agents not to get a Series 65 license because doing so would make them a “fiduciary” and would increase their liability. I’ve strongly stated that I think this opinion is dangerous, but now with the DOL regs pertaining to assets in IRAs, my position that every insurance agent should get a Series 65 license has been greatly strengthened.

Since the DOL’s new regs state that any advisor giving advice to clients about money in their IRA is a “fiduciary,” insurance agents might as well become fiduciaries by obtaining their 65 licenses.

The new DOL regs are trying to force advisors to truly give advice that’s in their clients’ best interest. I can’t wait for the lawsuits against advisors who violate this rule. Hopefully, they will run many out of the business.

The best way to comply with these new regs is to get a 65 license and find a low drawdown/tactical money management platform to use.


It’s a new day and the time of Series 7 licensed advisors who are used to selling loaded mutual funds or insurance only licensed agents who are used to selling massive amounts of FIAs in IRAs is coming to a close.

One trick ponies (advisors who offer a limited amount of options to clients looking to protect and grow wealth in qualified plans/IRAs) are looking at lawsuits for violating the new DOL fiduciary standard regs. Advisors who plan on continuing to go after the IRA market better wake up, or the DOL may be coming to visit.

Insurance agents, you better think seriously about getting a 65 license.

For Series 7 licensed advisors, this is the excuse you need to become an independent advisor.