facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast blog search

The Department of Labor Ruling and the Importance of Being a Fiduciary to our Clients


You may have heard through various media outlets that on April 6, the Department of Labor announced the long-anticipated fiduciary rules. These new regulations are expected to significantly impact how people save for retirement and protect families from conflicted retirement advice.

What is a fiduciary? A fiduciary is a firm or individual who must put their client’s interests first, ahead of their own. Registered Investment Advisors, like Key Wealth Partners, are required by law to follow this standard and adhere to complete transparency.

Over time, the new rules will extend this higher standard to other types of advisors (i.e. brokers, insurance agents, etc.) advising on retirement accounts, requiring them to act in the best interest of their clients when offering advice and recommendations. This standard includes providing guidance that is unbiased and fees that are clear and upfront.

Prior to the implementation of this rule, a recommendation for these advisors only had to be “suitable.” The problem with the “suitability standard” is that some advisors could sell high-fee products, even if a lower-priced option was just as appropriate or available, in order to earn a higher commission. The goal with this new rule is that there will be fewer conflicts of interest in the retirement savings industry.

The Cost of Biased Advice

According to a 2015 report from the White House Council of Economic Advisers (CEA), fees and biased advice cost middle-class families in America an average of $17 billion per year. While these new rules are a step in the right direction, it’s important to understand that Wall Street brokerage firms will still be allowed to sell proprietary products, which means their advice could potentially be biased. For example, annuities and other high-fee investments that provide brokers a higher commission can still be sold into retirement accounts. And while brokers must inform clients that their pay is commission-based, if the investor neglects to read the disclosures, they won't know where their broker's interests lie.

What Does This Mean for You?

Despite these changes, it’s still just as important as ever to work with a fiduciary. At Key Wealth Partners, we are a team of independent advisors serving our clients as a fiduciary. Simply put, we put your best interests first.

We are, and have always been, committed to providing you with the best advice we can give without any conflicts of interest. We only recommend solutions that we believe align with a client’s individual goals, and we adhere to the aim of creating unique financial strategies for each client. We are required to act with undivided loyalty to you and provide complete transparency and disclosure when it comes to our compensation or investment approach. As a result, we believe our business model offers greater transparency, so you always know what you are paying for or investing in.

Particularly, until the newest rules take effect, it’s crucial to be sure that you thoroughly research an advisor before choosing to work with him or her. An advisor should be open to sharing their business philosophy with you, including how they choose investments, what their process looks like, any potential conflicts of interest they face, and how they’re paid.

At Key Wealth Partners, LLC, we take pride in our transparency and objectivity. If you’re unsure about your current retirement strategies, haven’t reevaluated your investments in several years, or are just interested in learning more about what it means to work with a fiduciary, we are happy to offer you a complimentary consultation. Call our office at (717) 283-4186 or email me at dniggel@keywealthpartners.com to schedule a “Get Acquainted” meeting.

About David

David Niggel, CFP®, ChFC®, AIF® is the founder and president of Key Wealth Partners, LLC, an independent wealth management firm serving individuals, families, and business owners. Along with over a decade of financial services experience, he has advanced knowledge and training in providing holistic financial planning with fiduciary and ethical care, holding the CERTIFIED FINANCIAL PLANNER™, Chartered Financial Consultant®, and Accredited Investment Fiduciary® certifications. With hands-on entrepreneurial experience, he has the unique ability to help clients meet both their individual and business goals. Based in Lancaster, he serves clients through the York, Harrisburg, Hershey, and Central, Pennsylvania areas. Learn more by visiting www.keywealthpartners.com or connecting with David on LinkedIn.