Labor Department Proposes New Fiduciary Rule on Rollovers - Adviser Investments

Labor Department Proposes New Fiduciary Rule on Rollovers

July 8, 2020

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Labor Department Proposes New Fiduciary Rule on Rollovers

You may have heard about the recent Department of Labor (DOL) ruling on retirement plan advisers. All these rules and regulations come down to one thing: Does your adviser put your interests first? Not necessarily. Here’s what you need to know.

Back in 2016, the DOL attempted to tighten up the regulations for certain financial advisers when it came to retirement plans, requiring those providing advice to plan participants to act as fiduciaries—that is, they’d be required to put the best interest of retirees first when recommending financial products. But a federal appeals court struck down that version of the rule in 2018, sending the DOL back to the drawing board. Last week, the DOL put forth a proposed replacement.

The new proposal allows advisers to recommend rollovers to investors, subject to making certain disclosures. The new rule attempts to bring the DOL’s regulations into alignment with the SEC’s Regulation BI, which also mandates disclosures to clients of both brokerage firms and advisory firms when recommending rollovers to their clients.

In other words, expect a new batch of small-print forms from your retirement plan adviser. (Adviser Investments’ version, aka Form CRS, is available here and will arrive in clients’ quarterly statements this month.)

Why Should You Care as an Investor?

Rolling over from employee benefit plans like 401(k)s to IRAs is a big financial decision—for many investors, it’s where the bulk of their lifetime savings reside—making it all the more critical that investors get good advice on what to do, how to do it and that their strategy matches their long-term goals. Under the new rules, advisers are able to recommend that you roll over your assets into investment vehicles whose sponsors may be paying them some kind of commission—they just have to make sure to tell you about it via the disclosure form.

With more firms now blessed by both the SEC and DOL to get into this market, investors will likely have a wider choice of advisers for their retirement accounts (“choice” being one of the DOL’s arguments for the exemption). This, nominally, is a good thing. But it may also allow more wiggle room for unscrupulous advisers to put rollover funds into accounts that earn them a bigger cut. We think the need for due diligence and asking the right questions is all the more critical when choosing an adviser to partner with.

The Adviser Investments Approach

Since our founding, we’ve followed the 1940 Investment Advisers Act, and its fiduciary standard, for all of our clients’ investments, not just those in retirement accounts.

At Adviser Investments, we’ve never thought brokerage standards were adequately strict. As a registered investment adviser, we are held to a higher standard as a fiduciary. We’re always required to put a client’s interests ahead of our own; we’d do it even if it wasn’t required. It’s simply the right thing to do.

If you’re looking for an adviser or unsure if yours is on the up-and-up, we’ve created a checklist of sample questions to ask to get a sense of whether they’re a fit for your needs.

Podcast: Dividend Stocks: Generating Income in a Low-Interest-Rate World

Where’s an investor to find income opportunities that keep pace with inflation in an environment of low interest rates and considerable market volatility?

The managers of Adviser Investments’ Dividend Income strategy recently sat down for a conversation about the current landscape for dividend investors and what they look for when they’re constructing a portfolio. Join Portfolio Managers Charlie Toole and Steve Johnson and Equity Research Analyst Kate Austin in this informative discussion for dividend investors of all stripes.

Topics include:

  • Should income-focused investors seek out dividend-paying stocks or bonds when interest rates are low?
  • Signals that suggest a company is about to cut its dividend payment
  • How do dividends provide a window into how well a company is run?
  • What sectors should income-focused investors seek out?
  • … and much more!

It’s never too soon to get better acquainted with dividend-paying stocks and how they can serve as portfolio offense and defense. Click here to listen now!

And for more on this topic, please read our exclusive special report, Dividend-Growth Stocks: Investing for Growth and Income.

Special Report: Indexing vs. Active Management

Active or passive? The debate rages on. Should you put your investment dollars into the hands of a professional (and pay for their expertise) or cut costs and try to match the return of the markets with an index fund?

In this special report from Adviser Investments, you’ll learn the benefits and drawbacks of each approach so you can make the best decision for you and your hard-earned cash. Among the topics discussed:

  • Where and when the fee advantage of index funds and ETFs makes the most sense
  • Whether active managers manage risks more capably than index funds
  • Can active managers actually beat the market?
  • Tips and tricks to analyze and monitor mutual fund stock-pickers
  • …and much more!

It’s never too soon to become a more informed investor. Please click here to receive this free, no-obligation special report today!

Adviser Investments’ Market Takeaways

Calm and clarity have been sorely lacking when it comes to market news recently—that’s why we’re providing Today’s Market Takeaways, short videos in which a member of our investment team analyzes what the market’s telling us.

Recently, Equity Research Analyst Kate Austin looked at what we learned from the unusual first half of 2020, while Vice President Steve Johnson commented on the data and trends we’re watching for the year’s second half.

About Adviser Investments

Adviser Investments operates as an independent, professional wealth management firm with expertise in Fidelity and Vanguard funds, actively managed mutual funds, ETFs, fixed-income investing, tactical strategies and financial planning. Our investment professionals focus on helping individual investors, trusts, foundations and institutions meet their investment goals. Our minimum account size is $350,000. For the seventh consecutive year, Adviser Investments was named to Barron’s list of the top 100 independent financial advisers nationwide and its list of the top advisory firms in Massachusetts in 2019. We have also been recognized on the Financial Times 300 Top Registered Investment Advisers list in 2014, 2015, 2016, 2018 and 2019.

For more information, please visit www.adviserinvestments.com or call 800-492-6868.


Disclaimer: This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities or choose a particular educational savings plans. Our statements and opinions are subject to change at any time, without notice and should be considered only as part of a diversified portfolio. Mutual funds and exchange-traded funds mentioned herein are not necessarily held in client portfolios. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed.

You may request a free copy of the firm’s Form ADV Part 2A, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged.

Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs.

The Barron’s Top 100 Independent Wealth Advisors rankings consider factors such as assets under management, revenue produced for the firm, and quality of practice as determined by Barron’s editors. The award sponsor has not disclosed how many firms were surveyed or considered for this recognition, nor the percentage of total participants that ultimately received recognition. For more information and a complete list of recipients visit https://www.barrons.com/articles/are-ria-firms-growing-too-fast-the-story-behind-the-trend-51568420132. Years Received: 2019, 2018, 2017, 2016, 2015 & 2014.

The Barron’s Top Advisor Rankings by State (Massachusetts) (also referred to as Barron’s Top 1200 Financial Advisers) considers factors such as assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work. The award sponsor has not disclosed how many firms were surveyed or considered for this recognition, nor the percentage of total participants that ultimately received recognition. For more information and a complete list of recipients visit https://www.barrons.com/report/top-financial-advisors/1000/2019. Years Received: 2019, 2018, 2017, 2016, 2015 & 2014.

The Financial Times 300 Top Registered Investment Advisers is an independent listing produced annually by the Financial Times and Ignites Research. According to the Financial Times, in 2019, approximately 2000 firms were invited to be considered for its list; 740 responded with 300 being named to this list. The listing reflects each practice’s performance in six primary areas: Assets under management (70-75% of a firm’s score), asset growth (15% of a firm’s score), years in existence, compliance record, credentials and online accessibility. For more information and a complete list of recipients visit https://www.ft.com/content/44d2b2b2-6cef-11e9-9ff9-8c855179f1c4. Years Received: 2019, 2018, 2016, 2015 & 2014.

Awards referenced above do not consider client experience and are not indicative of such. Nor are awards indicative of future performance. Unless otherwise noted, Adviser Investments does not pay a fee to participate in any of these awards. Additionally, awards typically only consider and recognize participants that choose to participate; and are often based on information supplied by the participants—such information should not be assumed to be verified by the sponsor of the award.

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