This spring, the Department of Labor is set to implement a rule that would hold financial advisors to a higher standard of client service when it comes to investment recommendations—that is, unless the Trump administration modifies the new policy.
Fearing that outcome, Betterment founder and CEO Jon Stein published an open letter to the president-elect in the Wall Street Journal on Monday, voicing his company’s support for the rule. Betterment, an online investment advisor with over $5 billion in assets under management, counts retiree advocates like the AARP and policymakers like Senator Elizabeth Warren (D-Mass.) among its allies on this issue.
Under current policy, advisors follow what is known as the “suitability” standard, under which they are allowed to be paid fees for recommending particular investment products. Critics say the arrangement creates conflicts of interest.