You may have heard in the media that on April 6, the long-anticipated fiduciary rules from the Department of Labor were issued. 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. The fiduciary standard has already been in place for firms that are Registered Investment Advisers, like Sportfishing Financial Group.

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.

Prior to this rule, a recommendation for these advisors only had to be “suitable.” The problem with this is that some advisors could then sell high-fee products, even if a lower-priced option was just as suitable or available, in order to get 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 costs 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 they’re choosing to be paid commissions, 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 Sportfishing Financial Group, we are independent advisors serving our clients as a fiduciary. 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. As a result, we believe our business model offers greater transparency so you always know what you are paying in fees.

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

At Sportfishing Financial Group, 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. To learn more, set a time so we can talk, or get out with us on one of our upcoming fishing trips, call 949-481-1807.

Meet Rick

Over a 25-year career in financial services, Rick has helped hundreds of business and personal clients meet their investment goals by developing risk-efficient portfolio management strategies. He holds degrees in Economics and Psychology from the University of California, Irvine.

The water is Rick's second home: He and his family have been fishing Southern California and Baja going on four generations. In the 1940s, his grandmother worked at the Cannery Restaurant in Newport Beach—when it was an actual Albacore cannery. In the 1950s, his father was on the crew that built two of the boats still in service at Dana Wharf Sportfishing.

To schedule a complimentary wealth consultation or to get a second opinion on your financial plan, contact Sportfishing Financial today. To learn more about Rick, visit his website and connect with him on Facebook. To ask a question or get our list of upcoming fishing trips, call 949-481-1807.

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