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IRA Financial Blog

New SEC Fiduciary Rule – Episode 182

SEC Fiduciary Rule

IRA Financial’s Adam Bergman discusses the new SEC Fiduciary Rule and how it will impact your retirement accounts.

In his latest podcast, Adam Bergman talks about the new SEC (Security and Exchange Commission) Fiduciary rule. It also known as the Regulation Best Interest rule, or BI. Here, Mr. Bergman will discuss the new rules and explain the differences between broker-dealers and registered investment advisers (RIA).

What is a Fiduciary?

Here is how Investopedia describes a fiduciary:

A fiduciary is a person or organization that acts on behalf of another person or persons to manage assets.

In the retirement industry, the fiduciary is responsible for making investments on your behalf. Everyone wants his or her money directed in a way that will garner the biggest returns. However, advisers and the like need to make money as well. The Fiduciary rules are here to ensure that all financial advisers put their clients’ best interests above their own.

Currently, only registered investment advisers must adhere to the fiduciary standards. Brokers, on the other hand, must only follow suitability rules. The investment advice given must only be in line, or “suitable”, to your financial goals. This means a broker can recommend a product that makes him or her the most money, even if another choice might be in the client’s best interest.

What Does the SEC Fiduciary Rule Entail?

The Reg BI rule is supposed to hold all advisers to the same (or at least, similar) standards. Brokers will now have more guidelines to ensure they put their clients’ best interests first. Brokers will be required to disclose conflicts of interest and compensation received for the products they recommend. They will provide this info on Form CRS, Customer Relationship Survey. (Note: RIAs will be required to fill out this informational form as well.)

While this is a step in the right direction, after the debacle of the Obama-era DOL Fiduciary Rule, it doesn’t go as far as some people want. Investors want to make sure their fiduciary is putting them first. While Reg BI is making it better, there is still some ambiguity there.

What Does Reg BI Mean for My Retirement Plan?

That answer depends on what type of plan you have. For most IRA Financial investors, Reg BI won’t have much of an impact on you. This is because our clients are using Self-Directed IRAs to make their investments. As the name implies, you are responsible for the choices you make (self-directed). However, even if you self-direct, you might find yourself investing with a fiduciary. For example, you want some mutual funds or traditional equities in your portfolio.

There are a couple things you should know about the fiduciary. First, you should ask if he or she is an RIA or a broker-dealer. You know the RIA must put your best interests first. Brokers…not so much. It’s also a good idea to know what kind of education your fiduciary has. Make sure they have the knowledge to put your funds to the best use. Lastly, know what you’re paying for the service. Financial advisers are paid directly. However, brokers are typically commissioned based. You should know what they’re getting out of the investments they offer you.


As mentioned, the SEC Fiduciary rules, or Reg BI, is a small step to ensure your best interests come first. While a small step is better than none, more needs to be done.

Thanks for watching and be sure to check out our other podcasts and contact us @ 800.472.0646 if you have any questions about Reg BI!


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