The fiduciary standard is receiving significant press in light of the U.S. Department of Labor’s (DOL) approved expansion to the “investment advice fiduciary” definition under the Employee Retirement Income Security Act of 1974 (ERISA).
In broad terms, fiduciary duty means putting the interests of the client first, ahead of profits. It means that the advice a client receives serves the client’s best interests, not the pocketbook of the advice-giver.
The duty of a fiduciary, very simply, is to be trustworthy.
In contrast, brokers and insurance agents are held to a “suitability standard,” meaning they must give a recommendation that is suitable to the client’s needs. However, this recommendation may not be the best option for the client. The new DOL rule will require that any professional who gives investment advice for retirement accounts will be held to the higher fiduciary standard.
In acting on behalf of others, have I always been loyal to their interests?”
Clients of Sparrow Wealth Management (SWM) have been protected by the fiduciary standard all along. SWM has never sold products, and all of our compensation comes directly from our clients. As an RIA firm and a member of NAPFA, Sparrow Wealth Management acts as a trusted fiduciary by putting the client’s best interests first.
About Christopher M. Jones, CFP®
Christopher M. Jones is the Founder and President of Sparrow Wealth Management, a fee-only financial planning and investment management firm based in Hermosa Beach, CA. Before entering the investment field, Chris was a management consultant for Deloitte Monitor. He graduated summa cum laude from Brigham Young University with a B.S. in Economics and a minor in Business Management. Chris is a CERTIFIED FINANCIAL PLANNERTM practitioner.