The Department of Labor released the DOL fiduciary rule, and critiques are pouring in which makes it time to consider DOL Fiduciary and You. Does this matter to you? Should you do anything differently? What is impacted? These are all good questions, so we will share some perspectives. First, my own opinion, expanding fiduciary rules is a positive for investors. We spend a lot of time here talking about fees as a detriment to your retirement returns, and the fiduciary rules help shed light on fees while compelling your advisors to work in your best interest … that’s the key. Let’s see what others are saying about the rule and its implications.
One interesting way to consider it is by looking at industry reaction.
For truly comprehensive perspective, check in on the Investment News site, Fiduciary Focus. One interesting way to think about it is how stocks reacted, remember that comment about fees? Post-DOL fiduciary rule, Wall Street gives the nod to low-cost fund companies
One of the biggest concerns I have is that compliance costs may mean advisors or brokers walk away from smaller accounts, effectively shutting out those who would most benefit from the law. The most obvious way to solve that is with technology, and that already appears as a solution. In wake of DOL fiduciary rule changes, technology can solve problem of small accounts
You will likely see this in the form of a “robo-advisor,” but don’t fret, that may not be all bad. LPL partners with BlackRock’s FutureAdvisor, paving way for robo-pilot program Vanguard, Fidelity bank on robos, low cost strategies to ride DOL fiduciary rule wave
Still, don’t kid yourselves, the jury is very much still out on this. One has to wonder how much litigation will wrap around this rule before it is fully implemented? My guess is there will be plenty, but, ultimately, the consumer should come out ahead here. Plus, the SEC is considering similar mandates on the non-qualified side, i.e. not tax advantaged savings. Industry insiders react cautiously to DOL fiduciary rule Inside the Pros and Cons of a New Fiduciary Rule
One way, or the other, I think the hidden fees and incentives will be outed for you. Retirees find victory with the end of hidden fees
I suggest it is also good to look at this selfishly, from your perspective.
The LA Times does a nice job summing things up here. Five things to know about the new federal rules on retirement advisors
You are still on your own, for now, so let’s get a little smarter, too.
I focus maybe too much energy on getting you focused on fees. There are other ways to hurt your returns, and it is always good to understand that. These 2 investing biases could shrink retirement savings by 70 percent
You have seen here before talk of deferred income annuities – longevity insurance – or QLACs, Since I have long been an advocate, I love a reasoned perspective on them. A deferred-income annuity may help you get more cash later