This April, the Department of Labor issued its new fiduciary rule, which will require any advisor giving advice to retirement account holders to act in the client’s best interest. It certainly sounds like an obvious improvement, and we’re pleased to see some forward progress on this notion of a more global fiduciary standard. Remember, Hill Investment Group has been acting in the capacity of a fiduciary for our clients since the founding of our firm.

Nevertheless, we’re not all that hopeful to see newly minted fiduciaries taking on the title anywhere near its fullest extent. Their clients may be scratching their heads since surveys indicate that many already thought they had a fiduciary commitment from their advisor. In reality, they’ve been subjected to the suitability standard. It’s is far more common and gives a wide berth to advisors when defining what might be best suited for a particular client (think of high cost, proprietary, commission-based products).

Interested in additional reading on this topic?

• “What New Rules on Retirement Savings Mean for Investors” in The New York Times
• “Fiduciary Rule Better Protects Investor Interests” from Morningstar

Sometimes our clients come on board with a few bad habits learned from prior investment experiences. They may be focusing on events outside of their control, or they may have confused strategy and outcome (meaning they don’t recognize that their good returns were mere luck). In a recent video from AQR, founding principal John Liew draws a clear difference between good and bad investors. We love his definitions for each, and we’ll continue our work converting more people to good investors. Click here for the video.

Many great discoveries are made by accident, and it turns out that Odds On: The Making of an Evidence-Based Investor is great for kids. Having one of the few advanced reader copies and curious to get some get a child’s perspective, I gently encouraged my 12-year-old daughter, Kathryn, to read it. She certainly enjoys reading, but business books are not her usual fare. While the rest of the family was watching Peyton Manning win Super Bowl 50, Kathryn was making deposits into her financial memory bank.

The next morning, while driving carpool, I asked her if she was enjoying the book. To my amazement, she had already completed it! To quote Kathryn: “I have a better understanding of what investing is…the old way is based on guessing and the new way is based on evidence.” While stated simply, it’s a powerful message that she’s sure to remember.