What is the latest news on the fiduciary rule?

February 6, 2017 by Healy Jones

President Trump has recently signed a measure that tells the Department of Labor to review the fiduciary rule – a rule aimed at removing conflicted fee practices that incentivize some advisors to make recommendations that would allow them to collect more fees from the 401(k) plan, but aren’t necessarily in the best interest of the plan’s participants. Originally, InvestmentNews reported that the the president’s order slows the implementation of the fiduciary rule by at least 180 days, and the magazine also reported that the “the review will be undertaken independently by the Labor Department, the White House aide signaled that the president was expecting significant change.”

What is the updated news on the fiduciary rule?

However, the latest update from financial blogger Michael Kitces is that the Executive Order that was signed does not actually delay the rule, it only instructs the Secretary of Labor to conduct a new “economic and legal analysis” on whether the fiduciary rule will cause harm to investors by “limiting access, triggering dislocations in the retirement services industry, or likely to cause increased litigation and increased costs for consumers.”

A delay to the rule’s implementation is possible, but it is unclear at this moment if the rule will actually be delayed, watered down or allowed to go live without any changes. Stay tuned!

We’ve written about the fiduciary rule several times – mainly because we believe that it is important for 401(k) advisors to offer conflict-free advice. The previous White House estimated that conflicts of interest in the retirement industry were costing American investors $17 billion a year. We believe that the fiduciary rule is good for American’s retirement plans, and will continue to offer conflict-free advice as a level-fee fiduciary.

If you are concerned that your current 401(k) advisor is focused more on producing fees for themselves instead of offering a fair retirement plan to your employees we should talk – schedule a conversation now!

Some of our writing on the fiduciary rule

We wrote a white paper that outlines some of the changes that will happen once the rule is implemented. It may now look less likely that the rule will go live, but we still like our white paper, which you can get here.

ForUsAll also published a post on the BIC exemption, called “DOL Fiduciary Rule: What is the BIC Exemption.” We explain what the BIC exemption is, and why some advisors will ask their clients to sign one.

Did you hire a 401(k) fiduciary or a broker? This is for plan sponsors who are suspicious that their 401(k) advisor is not a fiduciary but instead is merely a broker. The post outlines a number of questions that plan sponsors can ask their advisors to find out.

We also published a fiduciary checklist that companies can send directly to their advisors. It asks about licensing, fiduciary services and more.

ForUsAll as a fiduciary

At ForUsAll, we want to act in your employees’ best interests. We take on investment fiduciary responsibilities, including acting as a 3(38) investment fiduciary. If you are ready to work with a 401(k) advisor who is focused on your success as a plan sponsor, let’s talk today!

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Healy Jones
Healy joined ForUsAll because he believes that all Americans deserve a fulfilling retirement. As the head of marketing, he’s focused on spreading the word that small businesses can offer their employees a great 401k plan. Prior to ForUsAll, he ran the acquisition marketing team at Sunrun, the nation’s largest dedicated residential solar provider, where he lead the direct to consumer team to hundreds of percent year over year growth. He began his career in financial services, working for JP Morgan, Summit Partners, and Atlas Venture. Healy has an A.B. from Dartmouth College and an M.B.A. from Wharton. When he’s not working, Healy and his wife enjoy taking their daughter rock climbing and filling their wine fridge. When he finally retires, he hopes to start emptying the wine fridge.
Healy Jones

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