In case you haven’t heard, the Department of Labor promulgated a rule entitled the Fiduciary and Conflicts of Interest Rule, which the media has dubbed “the DOL rule.” This rule went into effect June 9, 2017.
The stated intent of this rule is to eliminate conflicts of interest in recommending financial products used for retirement. Nevertheless, on the surface, this should have no impact on our practice at Keystone Asset Management Strategies.
- We have made a point to become licensed in nearly every area of financial practice so as not to limit our product recommendations. It is said, “To he who holds only a hammer, everything looks like a nail.” Although earning and maintaining these designations is time consuming and costly, we do this because we want to avoid any appearance that we limit our recommendations based on our own limitations.
- The second way conflicts emerge is through differential compensation. It is human nature, that when presented with two equal choices, we would select the choice that rewarded us the most. At KeyAMS, we make every effort to select compensation that is the same among product recommendations. Since we already strove toward flat, equal compensation, the rule will have little effect on us.
- The third way conflicts emerge is from advisors obfuscating financial planning with product sales. We do not offer financial planning as a way to get you in the door to buy products. If you look at how our practice has evolved, we became a full member of Sagemark Consulting Private Wealth Services, the oldest financial planning firm in the industry.We charge a fee for our financial planning. This enables us to separate the costs for our advice, versus the recommendation of specific financial products. Our advice is separate from product sales. In fact, our financial plans do not include specific product recommendations. We may compare the impact on your life by using or not using life insurance, but we do not specify whose life insurance you should buy. If you later wish to work with us to implement the plan, we will then analyze the products, seeking those that are not only best in class, but, more importantly, that fit your financial plan.
As the DOL and the OMB evaluates the rule, I will continue to communicate with you about any potential impact these new rules may have on the services we provide. Please check the Blog space at www.Keyams.Net for more information as it comes available or call our office at 610-727-4898.