What Most Americans Think About Fiduciaries
Most Americans are still unclear about what it means to be a fiduciary financial advisor, according to a recent survey by Financial Engines. Nonetheless, two out of five say they’d leave their advisor if they learned that the advisor wasn’t a fiduciary.
While 93% of respondents believe advisors offering retirement advice should be required to put clients’ interests first, only 21% understand the difference between a fiduciary and a non-fiduciary, according to a Financial Engines survey of 1,025 U.S. adults 18 and older conducted in March.
There’s been some improvement in consumer education, but not much. Last year 18% of respondents understood the difference, according to Financial Engines. And 38% of those who have an advisor still aren’t certain whether their advisor is a fiduciary, this year’s survey found.
And yet the majority of respondents say they would take some form of action if they found out that their advisor wasn’t a fiduciary: 23% would go to another advisor and 18% say they would just stop working with an advisor entirely. Another 47% would start grilling their advisor about investment recommendations, according to the survey. Only 12% would continue as if nothing happened.
The majority of investors (53%) also believe the federal government should regulate investment advisors, the survey found. The same percentage, however, believe advisors are already legally obligated to put clients’ interests first, Financial Engines found.
The Department of Labor’s fiduciary rule, which purports to force retirement brokers to put clients’ interests ahead of their own, was scheduled to go into effect earlier this month. But the DOL delayed the rule until at least June 9, and is currently reviewing the rule and its effect on the industry and investors as per a February memorandum from President Donald Trump.