![]() ![]() 18, updates requirements for advisors who recommend investments to 401(k) and similar defined contribution plan participants and to individual retirement account (IRA) owners. Prohibited Transaction Exemption 2020-02-Improving Investment Advice for Workers & Retirees, published in theįederal Register on Dec. Plan sponsors that provide access to advice should understand how and by whom advisors are being paid and whether those payments result in conflicts of interest. ![]() Merrill Lynch has announced that it will stop offering commission-based IRAs and switch to fee-based accounts.New Department of Labor (DOL) guidance eases fiduciary requirements for professionals who recommend investments to 401(k) plan participants, allowing advisors to receive compensation from the mutual funds they recommend. There has been a move away from sales commissions and toward managed accounts, in which you pay a flat fee-1% per year is common-for the company to handle your retirement assets. Regardless of what happens to the fiduciary rule, many brokers and other financial-services firms have already changed their practices and pricing policies. See Also: Discover Valuable Insights From Financial Pros in 's Wealth Creation Channel Aside from their high fees, variable annuities are complex investments that should be approached with caution under any circumstances (see Income Guarantees, With a Catch). But sometimes you should just stay put-especially if you like your plan's investment choices and have access to lower-cost institutional-class mutual funds not available to retail customers.Īs to where you should put your money if you do choose a rollover, you won't go wrong following our advice to stick with top-performing mutual funds such as those in the Kiplinger 25, or solid individual stocks or low-cost exchange-traded funds (see Earn Up to 6% From Our Fund Portfolios). In her story on rollovers, senior associate editor Sandra Block points out that rollovers make sense if your 401(k) has high fees, or if you want to gain access to more investment options or have more control over your account. I think that goal, though laudable, raises two important questions: Should you roll over retirement funds into an IRA when you leave your job or retire (a strategy that Kiplinger's often recommends)? And if so, where should you invest the money? Specifically, the rule would target high-fee investments in rollover IRAs, such as variable annuities. ![]() To review briefly, the rule requires that brokers and other financial professionals who offer investors advice on retirement accounts-401(k)s, IRAs and rollover IRAs-act as fiduciaries, putting clients' best interests ahead of their own financial gain. See Also: The Best Online Brokers for Investors So this month we're going to bring them into focus. Department of Labor's proposed fiduciary rule-and President Trump's order to review it-I'm concerned that some of the practical implications for investors have been overlooked. Amid all the Sturm und Drang surrounding the U.S.
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