Note: This article is courtesy of Iris.xyz
By Rick Kahler
Both fee-only financial planning firms and companies that sell financial products are beginning to see some unintended consequences from the recent Department of Labor fiduciary rule.
The rule requires that all financial advisors who deal with an investor’s retirement accounts, including those who sell products, be held to a fiduciary standard. In the past, only RIA’s who are regulated by the SEC were held to such a standard.
The DoL intended the rule to discourage financial salespeople from placing high fee and commission products in retirement accounts. For fee-only advisers, one unintended consequence is an increase in documentation and paperwork, which increases the cost of doing business.
Another unintended consequence that could actually end up hurting consumers may be on the issue of churning.