New Rules Look to Raise Fiduciary Standards. We’ve Been There for Years.

Thursday, February 14, 2019

A devotion to transparency ensures that both our employees and our retirement plan clients get service free of hidden agendas.

sec fiduciary responsibility

By Eric Sholberg, AIFA

Last year, the Securities and Exchange Commission (SEC) proposed an investment-advice rule that—if implemented—would alter the standard of conduct of broker-dealers and provide more clarity around the relationship between individual investors and their investment professionals. The SEC effort was prompted in part by the regulatory uncertainty generated by the Department of Labor’s 2016 “fiduciary rule,” one that was recently vacated by the Fifth Circuit Court of Appeals. In short, the SEC rule aims to hold financial advisors to a higher standard. At Brighton Jones, we’re already there.

The Highest Level of Fiduciary Responsibility

The Retirement Plan Advisory Group at Brighton Jones maintains an ERISA 3(38) position across our entire investment lineup. Most others in the industry won’t take that level of fiduciary responsibility because they are afraid to take on the liability that comes along with it. At Brighton Jones, adopting a complete investment fiduciary stance aligns with the original principles on which we were founded.

Our founders, Charles Brighton and Jon Jones, saw an opportunity to offer comprehensive advice across a client’s entire balance sheet and only receive compensation from our client. At the time, the financial advisory model was utterly broken—sales were paramount, not service. Far too many advisors pushed esoteric financial arrangements and limited investment options that would net them the highest commission, the best interests of their clients be damned.

Our clients receive the same services, solutions, and investment options as those we offer within our own company retirement plan.

From day one, Brighton Jones has delivered objective, fee-only advice our clients deserve. While transparency in the financial industry has improved in the two decades since our founding, we’re still ahead of the curve with our relentless focus on the most underrated business model in the world: do the right thing for your client and they will appreciate it and tell their friends.

Built-in Oversight

How does this relate to investments? We practice what we preach: our clients receive the same services, solutions, and investment options as those we offer within our own company retirement plan. What we’ve come to expect in our plan is what we deliver to our clients—it’s as simple as that.

This approach offers an added benefit: our own employees act as a feedback loop. More than 170 financial professionals participate in our 401(k) plan; if any of them spotted a feature that was not in their best interests, they would alert us to the problem! A devotion to transparency and getting it right ensures that both our employees and our retirement plan clients get service free of hidden agendas.

Nothing to Hide

Although fee disclosure became required by law in 2012, many service providers in the retirement plan industry publish multi-page documents with countless fee contingencies due to their murky revenue and fee-sharing arrangements. We have one number: the fee our clients pay us. We don’t have kickback clauses with other vendors and we don’t sell products.

For us, fiduciary responsibility isn’t defined by law—it’s the only way we have ever operated and our clients will let us know if we ever stop delivering on that commitment.

Reach out to our team of retirement plan advisors for a complimentary and independent fiduciary fee analysis of your current providers.

Eric Sholberg, AIFA serves as a retirement plan advisor at Brighton Jones.

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