Financial Planning, Investment Management

Update: Brokers Did Run Scared Ahead of the Fiduciary Rule

The spring 2019 Morningstar magazine had an interesting article indicating brokers took notice of the fiduciary rule and acted. The article titled “Are Brokers Acting in Their Clients Best Interest,” by Authors Jasim Sethi and Aron Szapiro, studied data linking broker pay and their eventual recommendation of mutual funds. Sethi and Szapiro noticed that the Department of Labor Fiduciary Rule was long coming but short-lived and seemed to change brokers behavior for the better.  The news stories regarding client’s best interest and the run up to the implementation of the fiduciary rule, coupled with the significant preparations by the brokerages themselves for its implementation, probably helped curb the excesses by the brokers.

The study in Sethi and Szapiro’s article seemed to confirm this. Brokers started to recommend lower cost funds. The transparency caused by the media coverage seemed to shape behavior even before the rule became effective in 2017 and then was struck down in the spring of 2018. It’s unknown whether this self-restraint by the brokers will last. The Securities and Exchange Commission has proposed a new rule called Best Interest, addressing standards of conduct in April of 2018 and it has yet to be implemented.

We at Skyline have long held that the fiduciary standard of care is central to how we do business. We believe the legal obligation to put the client’s interest ahead of our own, eliminate conflicts of interest where possible, and if not possible, draw our client’s attention to the conflict should be the law for all who give advice.  


Mark Logan CFP® is a financial advisor at Skyline Advisors, a locally owned and operated Registered Investment Advisor providing money management and financial planning services.  Skyline Advisors is located at 405 32nd St., Ste 201 in Bellingham and also at

Mark can be reached at 360-671-1621 or at  


This article is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Skyline Advisors and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Skyline Advisors unless a client service agreement is in place.


The commentary on this website reflects the personal opinions, viewpoints and analyses of the Skyline Advisors, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Skyline Advisors, Inc. or performance returns of any Skyline Advisors, Inc. Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Skyline Advisors, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.