The Department of Labor’s fiduciary rule, which ultimately fizzled out and never became codified law, would have required Financial Planners who advise on retirement accounts to be a fiduciary. While this sounds like jargon to most of us, learning that a fiduciary means someone who is required to prioritize their client’s best interest is a little off-putting. The reason for this is, well, shouldn’t financial planners be acting in their client’s best interest already? The answer was, and still is: no. This doesn’t mean that there aren’t fiduciaries, however. Anyone with a series 66 license is considered an Investment Adviser and has several fiduciary duties they must adhere to, but if you want to ensure your planner has “a thorough knowledge of and ability to apply the fiduciary practices,” the accreditation you need to seek out is called an Accredited Investment Fiduciary (AIF). Quickly becoming one of the most sought out designations in the industry among professionals, the AIF certification reflects adherence to a stringent code of ethics and a deep understanding of what constitutes practicing as a fiduciary.
For Federal Employees, however, there is another layer to what is needed from your financial planner. Because retirement and employment benefits for federal workers are frustratingly convoluted and complex in comparison to other workplaces, having a planner who can navigate the complicated landscape is close to imperative. In regards to federal benefits, the only certification currently recognized by FINRA is the ChFEBC, which titles someone as a ‘Chartered Federal Employee Benefits Consultant.” The required 2-day course is adequate for familiarizing financial planners with federal benefits, but if you can find a financial adviser (or even a CFP, Certified Financial Planner) that is completely immersed in the world of federal benefits, that is the optimal situation for someone trying to maximize their retirement from the Federal Government. Although few and far between, such experts do exist.
Until Next Time,
**Written by Benjamin Derge, Financial Planner. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.
Financial Planning For Feds – Financial Planning for Federal Employees