The fiduciary standard is actually what plan participants have assumed they were receiving. This will control if not eliminate conflicts of interest when advisors help plan participants.
I see this change as a boon to 401(k) participants and bigger boon to people who will now be the auditors verifying that the advice is unbiased. I see this rule change as just another exit on the highway to a new fiduciary standard. Why? It’s all about the lack of bias, whether it’s the use of a computer model or the use of a flat fee type of billing arrangement. This lack of bias is in conflict with the way brokers currently operate in the retirement plan space (under the current fiduciary rules, where they are not plan fiduciaries) who are in the business of selling securities and perhaps getting better commissions for certain investment products or 401(k) platforms they have to push. The fiduciary standard is about putting the retirement plan ahead of any monetary gain; it’s about not making transactions or investments that benefit the financial advisorof the plan at the expense of the plan’s assetsChange in the fiduciary rule is inevitable. The trip to that new rule on that highway may be delayed, but it’s inevitable. The new fiduciary standard is inevitable, just like fee disclosure and 401(k) advice. While brokers may have been given a temporary reprieve, I believe that the DOL will make another attempt at changing the definition.
The fiduciary standard is inevitable for qualified retirement plans and IRAs. Any delays may result in strictler policy.
Please comment or call to discuss how this affects you.
- The Inefficient Retirement Plan Design (401kplanadvisors.com)
- More Savers to Get 401(k) Investment Advice (money.usnews.com)
- Survey: Fiduciary Duty Top Reason Investors Choose RIAs (401kplanadvisors.com)