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Modern Investing & the Value of Transparency

by David Van Meter, M.S.Acc., Ph.D.

Let's face it: the world of banking and finance is complex and rapidly changing. Many of us still scratch our heads and wonder why interest rates are still so low, and why stocks seem to trade within surprisingly narrow ranges. But not only do the markets fluctuate, but even the value of our money fluctuates to a surprising extent based on such factors as interest rates, the health of the economy, and the relative strength of the dollar. In a climate of such rapid change, how do you plan for a secure future?

Many people understand the value of having a trusted financial advisor to help them plan for their financial future, rationally assess their investment options, and professionally manage their investment portfolios. Equally importantly, when making financial decisions, fear and uncertainty can be an investor's worst enemy. The great mutual fund pioneer Jack Bogle once told an interviewer that one of the key missions of a good financial advisor is dissuade clients from making the wrong decision at the wrong time.

Thus a good financial advisor has always been committed to doing the right thing for clients. On April 6th of this year, the Department of Labor issued a 1,023 page rule that attempts to create a more systemic and rigorous regulatory structure for achieving exactly that same goal of ensuring that the client's needs come first in defined investment advisory relations. While much is still unknown about the intentional (and unintentional) consequences of this sweeping new regulatory mandate, one thing is clear to us: going forward, more relationships between a client and an advisor will fall under a fiduciary standard, and all relationships will become more transparent.

What does this mean for you? For over five years now, we have been gradually encouraging many of our clients to embrace a fiduciary relationship with us, using the TIMS platform through our broker-dealer Cadaret, Grant. This has enabled us to actively manage the portfolios of those clients in order to help them achieve their financial goals while taking on only as much risk as they are comfortable with. It has also made the fees and other expenses of the portfolio management process more transparent. We firmly believe that makes for a much healthier and more collaborative advisory relationship.

It is clear to us that going forward we will need to pursue a path of even more transparency with all of our clients, and that we will need to seriously assess whether or not managed accounts will best serve the interests of some of our clients under the new and broader fiduciary standards imposed by the DOL regulation. As it becomes clear how this new regulation will affect you, look forward to hearing from us to set a time to discuss this matter.

As always, we at Van Meter & Van Meter, LLC, are here to help you achieve your financial goals. Call us today at (315) 823-9200 with any questions or concerns!

Van Meter and Van Meter, LLC.
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