The Department of Labor is about to issue substantial rule changes for financial professionals retirement account advise. The rules will require brokers and other professionals in this arena to operate under a “fiduciary” standard. This means that they must be first loyal to their client’s best interests when giving advice on 401(k) and other retirement accounts. The purpose of the rules is to stop the existing hidden fees collected by brokers and advisors and to assure the most cost effective choices are being made.
Under the new rules, commission-based accounts won’t be allowed unless investors sign an agreement entitled a “best-interest” contract. If investors reject the contract, in many cases, they can change their IRA to fee-based accounts which do not take commissions. Stay tuned.
Jeff Newman represents whistleblowers.
