The initiative aims to define “best interest” according to the Department of Labor’s recently announced fiduciary standard for retirement planners.
The Best Interest Initiative, led by Texas Tech University professor John Gilliam, announced its first strategic partner in a nationwide research initiative intended to help financial advisers interpret a new federal rule.
Gilliam, an associate professor in the Department of Personal Financial Planning, is the lead researcher on the initiative, which will ask the crucial question: what does it mean to put the clients' best interest first? Although most planners say they do so, a rule released by the Department of Labor (DOL) in early April known as the fiduciary rule, now requires all retirement planners to act in their clients' best interests. It does not, however, define best interest or instruct planners how they can do so.
The movement is in keeping with the mission of the Society of Financial Service Professionals (FSP), which signed on to the initiative shortly after it was announced. FSP, whose membership encompasses many disciplines across the financial spectrum, has a long-standing commitment to leadership in ethics and education and sees the initiative as a vital means of both protecting consumers and empowering the industry.
“FSP is in total agreement with this initiative and very excited about the opportunity to work with Texas Tech University in an effort of essential importance to both the public and advisers,” said Joseph Frack, the CEO of FSP. “The prospect of bringing clarity to this key issue within the new DOL regulations is directly in keeping with FSP's Code of Professional Responsibility.”
Gilliam is continuing to reach out to other potential strategic partners for the research, which he said is critical to helping advisers know how to best serve their clients' needs.