What Are The Laws & Regulations That Fiduciaries Must Follow?

Very few relationships come under as much scrutiny as the one between a fiduciary and their client. Because this relationship requires such a high degree of trust from the client and allows fiduciaries legal responsibilities on behalf of the client, the highest standard of customer care available under law is the foundation to all of these relationships.

A fiduciary must balance excellent duty of care with excellent duty of advice. A fiduciary must act in the best interest of the customer, and must be able to provide full and fair disclosure of material facts and conflicts of interest.

Financial advisers and broker-dealers are regulated by different laws. The fiduciary system, established in the 1940s, leaves states free to develop their own set of fiduciary standards. This can confuse investors and lead to inconsistent definitions and interpretations under state law.

As part of the financial regulatory proposal in 2009, the Obama Administration proposed to standardize the care that investors receive from financial professionals, whether financial advisers or broker-dealers at the federal level. From this proposal, the Dodd-Frank Act directed the Securities and Exchange Commission (SEC) to study the need for establishing a new, uniform, federal fiduciary standard of care for brokers and investment advisers providing personalized investment advice. This has led to broad, standardized definitions of care that are closely monitored.

Further, the Department of Labor (DOL) is expected to set new legislation forth in 2013 for all others who work with pension and 401(k) plans and IRAs and whether or not they will be deemed fiduciaries under certain circumstances.

While the laws are currently under scrutiny and may be changing up ahead, the foundation of the guidelines for fiduciaries remains the same – the legal requirement to act in the best interest of the client at all times.  With this in mind, CMY Fiduciary Services is diligent in our absolute commitment to the highest standard of service and care.

At Carolyn M. Young Fiduciary Services we value the relationships with our customers and must meet these high standards – the best care in the best interest of the client at all times.

Carolyn M. Young Fiduciary Services has three certified fiduciaries on staff – each of whom is committed to providing professional guidance in a caring, helpful and effective manner.

Contact us today to see how we can help you.