The DOL Fiduciary Rule Can Help Your Business Processes

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By Thomas Phelps

Whatever you may think about John Oliver, he’s a great process improvement specialist. In just a few sentences, he recently summarized an entire retirement funding strategy that works for many people:

  1. Start saving now -– or ten years ago
  2. Low-cost funds are the best way to go -– invest and leave it alone
  3. Ask if your adviser is a fiduciary; if the answer is no, run away
  4. As you get older, shift your investments from stocks to bonds
  5. Keep your fees under one percent

As with many of Oliver’s other particular hobbyhorses, the wealth management segment brought a whole lot of attention to what had previously been thought of as a dry topic.

One item in particular caught a lot of attention: the fiduciary rule, which requires that wealth management specialists in the retirement area must be fiduciary advisors and have a client’s best interests at heart.


What the DOL Fiduciary Rule Really Means for Wealth Management

As Oliver brought to America’s attention, the widely-anticipated Labor Department changes to how financial advisors can counsel clients on retirement assets (commonly called the DOL rule) will begin to take effect in a year. This new conflict-of-interest—or fiduciary—rule requires all professionals to recommend what is in a client’s best interest when providing advice on 401(k) assets, individual retirement accounts or other qualified monies saved for retirement.

“A non-fiduciary advisor merely must make sure that an investment is suitable for you, which leaves the door wide open for a lot more potential conflicts of interest,” writes Pam Krueger in Iris Advisor. “That’s because many brokers and other non-fiduciaries are incentivized to sell you investments that generate fat commissions, whether or not the investments are in your best interest.” In fact, she writes, the White House Council of Economic Advisers estimates that U.S. consumers waste $17 billion every year on fees paid to advisors.

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