What is a "Fiduciary" and why is it important?

Despite the rumours that the Trump administration would do away with the "Fiduciary Rule" from the US Department of Labor, Alexander Acosta the Secretary of the Department will finally put it in effect on June 9th of 2017 and implementation will take place on January 1st, 2018. That leaves us with one question, what is this rule

Investopedia defines a "fiduciary" as a person or organization that owes to another the duties of good faith and trust. We would define it as someone that puts the clients interest before their own.

The US system has had the opportunity to register as a fiduciary since the SEC act of 1940 that was put in place by Joseph Kennedy, but it hasn't become popular until the early 90's and 00's. Why? Simple, it was more profitable to not sit on the same side of the table as your clients. So what should you look for in an advisor?

I. That he/she is registered as a fiduciary

II. That he/she isn't paid commissions from anyone and therefore you know exactly how much they are making from assisting you on your account.

III. While past performance is not indicative of future returns, a financial advisor with a clean record on broker check is more likely to be clean going forward.

If you're an expat, you should make sure that your advisor is regulated in you resident country as well as the United States. Many US expat experts are only registered in the US which leaves them misadvising you to use fake address. They sometimes are only registered in limited capacities in their foreign countries such as to sell insurance in Europe instead of investments. While the regulation is improving over the course of time, it is still a buyers beware environment.

The new law only applies to retirement accounts at this point. A full article on the new standards is available on Wall Street Journal website, click here.

Get a complimentary copy of the American expat guide at for more information about the financial planning process as an American expat. You can also visit and