The US Department of Labor is pushing forward a proposed rule to standardize fiduciary responsibility among those who give retirement and financial advice and Arkansas’s congressional delegation is providing resistance.
Gwen Mortiz with Arkansas Business reports in this week’s edition that advisors aren’t always required by law to act in a client’s best interest.
“Your lawyer has a fiduciary duty to you, your account has a fiduciary duty, but some advisors in the financial arena don’t have a legal requirement to do that. They may feel they morally have to, they may have an ethical code that they want to do that but legally they don’t have to. Some people have discovered this the hard way,” said Mortiz about her article.
She said some advisors claim a code of conduct but may not be registered as such in Arkansas.
“They may use language that sounds a lot like that. They might call themselves a retirement advisor or financial advisors. Some of those people are registered investment advisors and some of them aren’t. If they’re not registered investment advisors then they don’t necessarily owe you a fiduciary duty,” said Moritz.
Arkansas’s all-Republican congressional delegation is opposed to the Department of Labor rule proposal. Mortiz said opposition has cast the rule as misguided federal overreach and a “solution in search of a problem.”