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How You Get Financial Advice Will Change in the Future

Family Investment Center’s Salmen Talks About Financial Advice and a New Rule

 

The debate around a fiduciary rule is heating up again, which means you’re going to see more about the Certified Financial Planner® (CFP) Board of Standards as its Code of Ethics and Standards of Conduct reaches new areas. Also called the fiduciary standard, it’s been widely debated since the Department of Labor created a controversial rule in 2016 that could impact financial advice given by professionals.

Richard Salmen, president of Family Investment Center, is also the 2018 Chair of the CFP® Board of Directors, which means he’s often in high demand as a source for news articles on various financial/investment topics. He was quoted recently in two articles, one in the Chicago Tribuneand the other in Barron’s.

The CFP® voted that the 80,000 CFPs in the United States would have to follow the new fiduciary rule beginning in October 2019. The current standards say that CFP®s only have to follow the fiduciary standard when offering financial planning services. However, in October of next year, they’ll have to act as fiduciaries whenever they’re giving any type of financial advice.

“This is a monumental step forward in the evolution of not just CFP® certification,” Salmen told Barron’s, “but for the profession of financial planning.”

Many investment businesses have already made sweeping changes to comply with the fiduciary rule, some brought lawsuits saying the labor department had overreached in establishing the new rule. The Securities and Exchange Commission is proposing its own fiduciary rule, which willaffect retirement and non-retirement accounts.

Despite rumblings and rumors, the CFP® board decided to take action and not leave anything to question.

“We are raising the bar even higher now with a fiduciary standard that will apply anytime a CFP® professional gives financial advice,” Salmen told the Chicago Tribune.

The debate began following a White House report (Obama Administration) outlining how conflicted advice from investment advisors costs investors billions of dollars per year. However, for those, like Family Investment Center that have always operated as fiduciaries, the new rule only solidifies the way in which they’ve always practiced their profession.

The change in administrations at the White House has caused some back and forth. The Trump administration delayed implementing the Department of Labor fiduciary rule until July 2019.

“For those who want to avoid conflicted advice from investment professionals, always ask if they are held to the fiduciary standard. Make sure there are no hidden fees or commissions to be made off products they recommend,” says Salmen.

At Family Investment Center, we’ve operated as fiduciaries since day one. Contact us today and let’s plan your future.

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