Why Would My Advisor Ask Me To Sign A Fiduciary Waiver?

I have recently been informed that some advisors in our community have been asking clients to sign a “fiduciary waiver” so they “can keep working together in retirement accounts.”  This has prompted calls to BCR asking why they are doing this.

Historically and currently, advisors can register with different agencies on some or all of their client accounts that offer them different legal relationships and liability on the advice they give.  The bulk of the broker dealer industry relationships has been under what is called suitability.  In a suitability relationship, advisors do not have to do what is in the best interest of the consumer as long as their advice is suitable.  Due to the implicit conflict in selling commissioned products while giving advice, virtually all commission relationships are under suitability relationships.

A road less traveled (and one BCR has always chosen) is to be a fiduciary on all client accounts.  Being a fiduciary means that you agree to always give the best advice you know of to your clients.  The Department Of Labor (DOL) has passed a regulation (Fiduciary Rule) that requires in early 2017 all advisors must be fiduciaries on retirement accounts and both the client and the advisor must sign an acknowledgement that the advisor is working under the fiduciary rule. In an attempt to fight the obligation of giving the best advice they know of, many brokerage firms are going in two different directions:

  1. Creating higher cost fiduciary options for retirement accounts and requiring clients to move into them if they are to continue working together
  2. Requiring clients to sign what was referred to me as a “fiduciary waiver” acknowledging that the client is not requiring the advisor to provide best interest advice.  .  This is technically two documents; 1 a fiduciary acknowledgement and 2 the Best Interest Contract Exemption (BICE)

It is important to know that if you were caught off guard and agreed to a decision that you are not comfortable with, it is not too late to make a change.  Between fiduciary advisors, robo advisors, discount brokers and other options you are likely to find an option that allows you to sleep well at night. 

If you are trying to decide how to research your options, I would suggest you start your hunt by reading The Investment Answer by Daniel C Goldie.  Amazon describes it:

What if there was a way to cut through all the financial mumbo-jumbo?  Wouldn’t it be great if someone could really explain to us–in plain and simple English–the basics we must know about investing in order to insure our financial freedom?

At last, here’s good news.

Jargon-free and written for all investors–beginner, experienced, and everyone in between–The Investment Answer distils the process into just five decisions–five straightforward choices that can lead to safe and sound ways to manage your money.

When Wall Street veteran Gordon Murray told his good friend and financial advisor, Dan Goldie, that he had only six months to live, Dan responded, “Do you want to write that book you’ve always wanted to do?” The result is this eminently valuable primer which can be read and understood in one sitting and has advice that benefits you, not Wall Street and the rest of the traditional financial services industry.

The Investment Answer asks readers to make five basic but key decisions to stack the investment odds in their favor. The advice is simple, easy-to-follow, and effective, and can lead to a more profitable portfolio for every investor. Specifically:

  • Should I invest on my own or seek help from an investment professional?
  • How should I allocate my investments among stocks, bonds, and cash?
  • Which specific asset classes within these broad categories should I include in my portfolio?
  • Should I take an actively managed approach to investing, or follow a passive alternative?
  • When should I sell assets and when should I buy more?

In a world of fast-talking traders who believe that they can game the system and a market characterized by instability, this extraordinary and timely book offers guidance every investor should have.


-Marshall Rathmell-

Marshall Rathmell

Marshall Rathmell

Marshall Rathmell CFP®, CPA/PFS is the CEO, Shareholder and Financial Planner with BCR Wealth Strategies.