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The ABC’s of the DOL fiduciary rule

July 18, 2016

 

 


The ABC’s of the DOL fiduciary rule

Confusion could be the rule’s greatest by-product due to its broad and somewhat general nature

Jul 12, 2016 @ 1:00 am | By Anthony Domino, Jr. | Investment News

A casual reading of any financial publication recently is certain to have a headline featuring three letters: D – O – L. What they are referring to is the U. S. Department of Labor Conflict of Interest Rule, popularly referred to as the fiduciary rule. The culmination of a long tussle between regulators and professional advisers who engage in retirement planning — the final version has seemingly not satisfied either camp. Nonetheless, the most concerned — financial advisers and the companies they represent — will do what is needed to adapt while some final maneuverings remain.

The amount of investor assets accumulated in retirement plans is significant — $6 trillion, according to recent Cerulli & Associates research. Add another $3 trillion in individual retirement accounts, and that’s a total of $9 trillion. Sounds like a lot, but when spread over the 245 million adult Americans, it is a less than impressive $36,750 per capita. Such a large market is certain to garner attention, and with that attention comes a certain amount of noise — and with noise comes confusion.

The final rule, as published, is 1,023 pages. Overall, it broadens the definition of a fiduciary to anyone who receives direct or indirect compensation for providing advice to retirement plans, plan participants or beneficiaries and IRA owners. Advice is characterized as a recommendation intended to result in action.

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Loreen M. Gilbert, CIMA, AIF, CRC, CLTC – President, WealthWise Financial Services
Blue Vault
July 6, 2016

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