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The Fiduciary Standard

  If you haven’t heard, the relationship between the investing public and their advisors is undergoing some significant changes. That change has to do with the level of care advisors must apply when making recommendations to clients.  A great number of advisors who were held only to a standard of “suitability” will now be required to act only in the client’s “best interests”.  This is called the fiduciary standard.
     But wait, aren’t all advisors supposed to act in the client’s best interest?.  I haven’t met an advisor who says they don’t.  But now the Department of Labor, through its “DOL Rule”, has decided that some forms of advisor compensation are inherently conflicted and not in the best interests of clients. Starting June 9th, all advisors servicing retirement accounts must adhere to the fiduciary standard and may not earn more than reasonable compensation.  The rule does not define what reasonable compensation is.
     Confusing? Absolutely.  What does this mean for investors? There is a lot of talk about advisors leaving the business and clients being turned loose because they won’t generate enough revenue to make it worth an advisor’s time.  Many believe the rule harms the public more than it helps.
     What should investors do? If you haven’t already, sit down with your advisor and talk to them about the DOL Rule.  Ask them how it will affect your relationship, the investments you own and what to expect going forward.


About LPL Financial
LPL Financial (Nasdaq: LPLA) was founded on the principle that the firm should work for the advisor, and not the other way around. Today, LPL is a leader in the markets we serve,* supporting nearly 20,000 financial advisors, and approximately 800 institution based investment programs and 500 independent RIA firms nationwide. We are steadfast in our commitment to the advisor-centered model and the belief that Americans deserve access to personalized guidance from a financial advisor. At LPL, independence means that advisors have the freedom they deserve to choose the business model, services, and technology resources that allow them to run their perfect practice. And they have the freedom to manage their client relationships, because they know their clients best. Simply put, we take care of our advisors, so they can take care of their clients

*Top RIA custodian (Cerulli Associates, 2020 U.S. RIA Marketplace Report); No. 1 Independent Broker-Dealer in the U.S (Based on total revenues, Financial Planning magazine 1996-2021); No. 1 provider of third-party brokerage services to banks and credit unions (2020-2021 Kehrer Bielan Research & Consulting Annual TPM Report); Fortune 400 Company as of June 2021. LPL and its affiliated companies provide financial services only from the United States.

Jones & Company and LPL Financial are separate companies.

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