The Department of Labor rules require financial advisers to act in their clients’ best interest but don’t define best interest or explain best practices.
A Texas Tech University professor is the lead researcher in an initiative to answer the key question that faces financial advisers in light of the U.S. Department of Labor's (DOL) fiduciary rule issued last week requiring financial advisers to act in the “best interest” of their clients. The rules provided much in the way of regulation, but little in the way of definition or guidance about what constitutes acting in the best interest.
To answer that question, personal financial planning professor John Gilliam created the Best Interest Initiative. The initiative will allow researchers in the Department of Personal Financial Planning to study what best interest means and how advisers can practice under these rules, plus begin to help the industry formulate and define “best practices” under these important new parameters on financial advisers.
“No one has defined best interest,” Gilliam said. “The Department of Labor rule uses the term but doesn't specify what the terms mean.”
Texas Tech's Personal Financial Planning program, regarded as one of the key academic thought leaders in the industry, is a natural fit to undertake this important research, which Gilliam believes will be vital to protect consumers and help the industry become stronger.
The Center for Financial Responsibility seeks strategic partners interested in meaningful research that will explore the parameters of the “Best Interest” rule announced by the DOL last week.
For more information contact Gilliam. He is looking for organizations and individuals with interest in the financial planning community and protecting consumers to partner with and fund the research.