‘Customers First’ is the Byword in New Regulations to Protect Investors
New regulations requiring financial advisors and brokers handling IRA and 401K accounts to act in the best interests of their clients were released on April 5 by the Department of Labor.
Prior to the new regulations, which will take effect in Spring 2017, brokers have been required only to recommend ‘“suitable” investments, such as a more expensive mutual fund that pays a higher commission when an otherwise identical, cheaper fund would have been an equal or better alternative.
According to the New York Times, the new rule is expected to encourage a switch into lower-cost investments for many investors. In addition, it potentially could shift many transactions away from commission basis toward flat annual fees for managing accounts.
“The marketing material that I see from many firms is, ‘We put our customers first,’” said Thomas E. Perez, the Secretary of Labor, in a Times interview. “This is no longer a marketing slogan. It’s the law.”
We are proud to say that since our founding, Biltmore Capital has been committed to “putting our customers first” through the very principles now issued as law by the U.S. government. Unlike many firms, Biltmore does not receive commissions on investments.
We bring objectivity to wealth management that avoids many of the potential conflicts that exist at larger firms. Applying a rigorous due diligence process, we are free to choose among the best solutions, lowest-cost investment options, and most cost-effective lenders.
Please feel free to contact me if you have any questions about the new regulations or our policies here at Biltmore Capital Advisors.