PITTSBURGH--(BUSINESS WIRE)--Brokers and Investment advisers indicate strong support for the Department of Labor ERISA fiduciary standard, according to the report on the 2015 fi360 Fiduciary Standard Survey from fi360 and FiduciaryPath, “Seeking Trusted Advice for Individual Investors.”
The results are particularly timely as the White House calls on the Department of Labor to propose fiduciary rules for advice to retirement investors. The rules have not yet been made public, but are intended to update decades-old ERISA regulations and eliminate conflicts of interest that harm investors and their retirement nest eggs.
Last week, the Chair of the Securities and Exchange Commission, Mary Jo White, said the SEC should extend the fiduciary standard to brokers, based on the fiduciary principles in the Investment Advisers Act of 1940. Those principles govern investment advisers’ fiduciary duty to place investor’s interests before their own or their firm’s interests. Brokers generally do not have a fiduciary duty to clients and can place their own or their firm’s interests ahead of the investor’s.
The fiduciary standard under ERISA is even more rigorous than in the Investment Advisers Act of 1940. More than seven out of ten of survey participants agree in concept with the Labor Department’s plan to propose a rule that would cause intermediaries to be considered fiduciaries under ERISA:
- 74% of survey participants agree in concept with the Labor Department’s plan to propose a rule that would expand the number of intermediaries who are considered fiduciaries under ERISA.
- 91% say yes, the fiduciary standard should apply to advice to investors on rollovers from 401(k) accounts to IRA accounts. That’s up from 79% in 2013.
- Nearly 82%, up from 72% in 2013, say the same fiduciary standard that applies to 401(k) accounts should also apply to advice on IRA accounts.
“Advice is an inherently fiduciary function,” said fi360 CEO Blaine Aikin. “We are pleased to see that most practitioners feel the same. In the end, the conversation around fiduciary is about fairness and transparency in the marketplace.”
“Survey findings indicate many intermediaries who do not have to place their client’s interests before their own, want to do so. And it’s surprising how strong support is for the tougher ERISA fiduciary regulations and for the fiduciary standard for rollovers from 401(k)-type accounts to IRAs,” said Kathleen M, McBride, AIFA®, Founder of FiduciaryPath, LLC, and Editor of the survey. “Advice on rollovers into IRAs is particularly important, because it is a vulnerable point for many retirement investors.”
The full report is available here: http://www.fi360.com/uploads/media/2015fiduciarysurvey.pdf
Now in its fourth year, the survey gauges financial intermediaries’ opinions on the fiduciary standard and their understanding of what the fiduciary standard means now, and as they work with investors in the future. The survey was open to all brokers, investment advisers, and insurance consultants and producers. It included questions about investor knowledge; costs, availability and access to advice; differentiating types of advisors and fiduciary versus non-fiduciary roles, titles, separating advice from product sales; disclosure, conflicts of interest; compensation models and trends, recruiting payments, demographics and more, to track fiduciary trends in the industry.
fi360 helps its clients gather, grow, and protect assets through better investment and business decision-making. Since 1999, fi360 has been providing innovate solutions to financial services providers, including the AIF® and AIFA® designation programs, the fi360 Toolkit™ software, and fi360 Fiduciary Score®. With extensive education, certification, software, and practice management offerings, fi360 is a one-stop shop equipped to provide individuals and organizations with the training, tools, and resources necessary to become more successful. To learn more, visit www.fi360.com.
FiduciaryPath offers independent, third-party assessments of a firm’s investment fiduciary practices for certification by the Centre for Fiduciary Excellence (CEFEX). Investment advisers, investment stewards of retirement plans, pension plans, or nonprofits, and investment managers may achieve certification, and public recognition of their fiduciary process, benefitting firms as well as clients. FiduciaryPath works with organizations to ensure that they are aware of their fiduciary responsibilities and that their investment process is managed to an appropriate fiduciary standard of care. For more information about FiduciaryPath, please visit www.Fiduciarypath.com or contact KMcBride@FiduciaryPath.com.