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What is ‘reasonable’ cost under DOL’s fiduciary rule? Well, it depends

April 12, 2016

Inherent to acting in a client’s best interest is ensuring costs are reasonable, an ERISA concept brokers need to understand

Apr 11, 2016 @ 12:01 am | By Greg Iacurci | Investment News

What is “reasonable” compensation? It’s a question brokers may not have considered prior to the Labor Department’s recentpush to regulate investment advice in retirement accounts.

However, brokers need to start paying attention, because this seemingly simple question will have a big influence on the way they are able to do business in qualified retirement accounts going forward.

The Department of Labor on Wednesday issued its landmark “fiduciary” rule, which says intermediaries giving investment advice in accounts such as 401(k) plans and IRAs must adhere to a “fiduciary” standard as laid out under the Employee Retirement Income Security Act of 1974. Until now, brokers have been able to operate under a less-stringent “suitability” standard.

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Gordon Dunne
September 30, 2019

“Always, but especially in this day of lawsuits and ever increasing regulations, the responsibility for a financial advisor t do their own due diligence on products they sell falls squarely on themselves. No one is going to take greater interest in protecting their practice than they are. We use the Blue Vault Partners Nontraded REIT Review to keep us informed of the performance of every single nontraded REIT. Finally, complete transparency is available for advisors using nontraded REITs. Every advisor using REITs in their practice should make the small annual investment of subscribing to Blue Vault’s reporting services.”