A new law could mean big changes for your retirement savings
June 9, 2017 - Today, the Department of Labor (DOL) officially implemented the "Fiduciary Rule" (also known as the the "Conflict of Interest Rule").
Beginning today, financial institutions and retirement plan advisors must provide advice and act in the best interests of their clients - putting their clients' interests above their own.
Many consumer advocates say the fiduciary rule is a momentous step in the right direction for workers hoping to retire comfortably.
The fiduciary rule lays out “consumer protection standards” that advisors must adhere to. They are as follows:
- Give advice that is in the “best interest” of the retirement investor.
- Charge no more than reasonable compensation; and
- Make no misleading statements about investment transactions, compensation, and conflicts of interest.
The new fiduciary rule will apply only to advisors working with your retirement assets—for most people, that’s a 401(k), or a Roth or traditional IRA.
What the Fiduciary Rule Means For You
You'll See What You’re Paying For
Under the new rule, there’s a push for firms to be more transparent around the fees you’re being charged.
Not sure what you're paying for? Ask your advisor how he or she is getting paid to work with you—and how much their cut will be.
You May Want to Make a Change
Do you think your advisor is a fiduciary? They might not be.
Currently only 10% of financial advisors are fiduciaries.
If you are sensing issues —if you're not happy with your new fee-for-service arrangement, for instance, or you're asking any of the preceding questions and getting fuzzy answers—it may be time to leave your advisor.