Fiduciary Rule

The Fiduciary Rule is a regulation aimed at ensuring financial advisers act in the best interests of their clients, particularly regarding retirement accounts and investment advice. The rule was designed to eliminate conflicts of interest and protect investors from biased advice that may favor the adviser’s compensation over the client’s financial well-being. Under the Fiduciary Rule, advisers must put their clients’ interests first, providing honest and transparent guidance.

Example

A financial adviser managing a client’s 401(k) must recommend the best available investment options for the client’s retirement goals, even if it means earning lower fees or commissions. This contrasts with non-fiduciary advisers who may prioritize products that pay higher commissions, regardless of the client’s needs.