It’s difficult to put this genie back in the bottle,” Danford said of the impending rule and action by the DOL. “Consumers want protection and Wall Street looks bad fighting it.
St. Joseph, Missouri (PRWEB)
June 17, 2017
It’s been more than two years since the Obama White House offered a report on the cost of conflicted investment advice to investors throughout the country, which spurred a Department of Labor investigation and the possibility of a new fiduciary rule. Despite the current administration’s reluctance to embrace those findings, the Department of Labor (DOL) began implementing the rule in early June 2017.
Essentially, the rule says that no investment adviser or broker can take commissions on products they sell to investors in retirement accounts.The White House report, which came out in February 2015, said investors lose billions of dollars per year due to conflicted advice from advisers who stand to make a profit on commissions.
Brokerage and insurance firms fought against the implementation of the fiduciary rule through lobbying and legal action, as they have much to gain in taking commissions. Dan Danford, founder/CEO of Family Investment Center, has written extensively on the topic since early 2015 and takes a different view than those firms.
“When investors get conflicted advice, it generally comes at the hand of ‘fee-based’ advisers, who use the terminology ‘fee-based’ as a smokescreen, because they’re actually taking commissions rather than fees alone,” says Danford.
He suggests that the smarter move for investors is to seek out a “fee only” adviser, which means they only charge a fee and will not be swayed one way or another on a particular investment vehicle due to the fact that they aren’t…