LifePlan Investment Advisors, INC provides our clients with the following regulatory documents:

  • Our Privacy Policy
  • Code of Ethics; and
  • ADV Part 2 (State Advisory Registration Form)

These documents are first provided to a client when they initially engage our planning service. They are also provided annually to all ongoing investment advisory clients.

Why do we do this? 

As a Registered Investment Advisory Firm, we have a “fiduciary” duty to do so. This requirement and responsibility is fundamental to our “advisory” relationship with clients and is the standard of transparency and disclosure that we are held to. By establishing LifePlan Investment Advisors, INC as a Registered Investment Advisory Firm in 2009 we embraced the higher fiduciary standard as a fundamental basis of our planning and advisory work.

That “fiduciary” relationship has long been required of CPA’s and Estate Attorneys, yet it remains, for now, uncommon in the financial industry – a lower “suitability standard” being the norm. Interestingly, brokers and insurance agents are licensed, regulated and authorized to execute financial transactions and be compensated by commissions for providing financial products that are generally suitable for clients. They may not provide, nor hold themselves out as investment advisors.

In 2010 Congress passed the Financial Reform Act in response to the market collapse in 2008, included a requirement that all financial advisors/representatives/agents be held and regulated to the higher fiduciary standard. For the past six years the insurance and brokerage industry and lobbyist have fought the implementation of that requirement.

Why do they not want this?

It has to do with conflict of interest, disclosure and transparency. They don’t want to exchange their product specific commissions that need not be disclosed, for level fees that must be fully disclosed and agreed to in advance by clients. They do not want level compensation on all products intended to minimize conflicts of interest. They also do not want the responsible for understanding a client’s full needs in order to provide “investment advice” that is deemed to be in the best interest of their clients.

One reason we selected Eqis Capital in 2009 as the investment platform we use, is that everything they do is also founded on the fiduciary duty. Their platform fees are a predetermined set percentage of asset, regardless of the managers used in a portfolio. They have no financial conflict of interest or reason to “push” one manager over another.  Folio, as their custodian is also compensated for their services with a flat published fee – they are not compensated by transactions.

We embrace the fiduciary duty as good for our clients, and preferred by us as an investment advisor.

Having read this article, you may start to notice national news on this issue. The Department of Labor is very close to enacting rules that will require a fiduciary duty for all advisors handling retirement accounts!  This is a very big change coming to the financial industry, and significant for agents and brokers who are not currently regulated under the fiduciary standard.