Probably you. The Securities & Exchange Commission (SEC) is moving forward in its quest to define who is a fiduciary for various client/adviser transactions. Currently, whether an adviser is a fiduciary when providing advice is most often governed by who he/she is employed by rather than the type of advice that is shared. Employees of brokerage firms often aren't fiduciaries while advisers who work for Registered Investment Advisory (RIA) firms, for example, many times are.

The SEC is seeking to harmonize a definition of fiduciary responsibility that is tied to advice as opposed to employment. Most brokerage firms are wary of an expanded fiduciary definition citing the additional costs they may incur.

Your clients probably have a difficult time understanding the concept. If they are conversant with the definition of a fiduciary, they would expect every adviser to be a fiduciary every time he/she provides advice. Clients are often shocked to learn that the majority of advisers are not providing advice under a fiduciary umbrella. This client misperception has existed for a long time and is one of the major drivers toward a more harmonized fiduciary definition.

Experts generally feel that advisers who are fiduciaries are more likely to provide a higher standard of care and exercise a greater level of due diligence when sharing advice. This theory is not lost on the SEC.

DCDB Contributor Robert C. Lawton is President of Lawton Retirement Plan Consultants, LLC a Registered Investment Advisory firm helping corporations with their investment, fiduciary, employee education and compliance responsibilities.   Mr. Lawton has over 25 years of experience working with retirement plan sponsors and is a Chartered Retirement Plan Specialist (CRPS) and Accredited Investment Fiduciary (AIF).  Mr. Lawton was  named as a Top 100 Retirement Plan Adviser by PLANADVISER and a Top 300 Retirement Plan Adviser by 401(k) Wire.  Mr. Lawton may be contacted at or 414.828.4015.

Register or login for access to this item and much more

All Employee Benefit Adviser content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access