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Investors Pay If Wall Street Wins A Fiduciary-Rule Delay
FYI: Wall Street continues a doomed fight for brokers’ right to give bad advice to retirement savers, all in the hopes of propping up earnings. After three stinging courtroom defeats, the industry procured a presidential memorandum directing the Labor Department to review its ban on giving disloyal advice to investors. Regards, Ted https://www.bloomberg.com/view/articles/2017-03-28/investors-pay-if-wall-street-wins-a-fiduciary-rule-delay
The industry is so out of touch with trends in this area. Fees and expenses are going down industry-wide. Clients who never asked us about this before are now doing so, wondering why most of the wire houses, banks, and insurance companies want a delay. As with most things in this world, it's all about money. Consumers should demand the financial people they work with accept and adhere to a strong fiduciary standard. They should ask for written proof, either the firm's ADV form, their Code of Ethics, or something else that is evidence of fiduciary status. Another question should involve commissions, and whether any of their income is based on commission from the sale of products. Consumers should ask to see documentation similar to above that confirms what they are told. If they are unable or unwilling to provide this, consumers should walk away immediately. There is a firm in Central Ohio that puts virtually everyone into annuities. I would love to be a fly on the wall when a potential clients asks those questions. Keep in mind that many companies are really two firms: one that provides the planning/advice, and one that sells the products. So, theoretically the planning/advice firm could say they are fiduciaries by not mentioning the other company that rakes in commissions from annuities and other commission products. Consumers need to be aware of this. I would be glad to discuss this in more detail with folks who may have questions. Again, it's all about the money.
Years ago when I ask if any of our 403(b) vendors acted as my fiduciary the answer was, "No, why is that important to you?" or "Hmmm...let me get back to you." I took the issue it up with the teacher's union and they had no clue what a "fiduciary" was.
We, as teachers, fought for 403(b)(7) offerings (primarily Vanguard) which help lower costs, but still these plans were not held to fiduciary standards.
I believe all 401(k) plans are required by law to be held to fiduciary standards, why not 403(B) plans?
Comments
It's an uncommonly used word, wonder why?
Here's wiki's write up of Fiduciary:
https://en.wikipedia.org/wiki/Fiduciary
We, as teachers, fought for 403(b)(7) offerings (primarily Vanguard) which help lower costs, but still these plans were not held to fiduciary standards.
I believe all 401(k) plans are required by law to be held to fiduciary standards, why not 403(B) plans?
Consistency, fairness and Rule of Law matter.