Stricter rules unveiled for brokers giving retirement advice

[Vern]

The Obama administration is unveiling rules that will require that brokers who recommend investments for retirement savers meet the stricter standard that now applies to investment advisers: They must act as "fiduciaries" — trustees legally obligated to put their clients' best interests above all.….
And a broker may have to tell you when they have a conflict of interest with regard to a financial product — like receiving fees — that could prevent them from putting your interest first in recommending it

Stricter rules unveiled for brokers giving retirement advice - Yahoo Finance

Another win for the middle class. Sure it’s not as big a win for the middle class as the Great Obama Bull Market but it’s a win. But its not a win for the 15% of the middle class that got out of the stock market in 2009 and missed out on the Great Obama Bull Market.

 

[Erod]

That's great, but at the same time, Obama wants desperately to get rid of the 15% percent tax on long-term capital gains. People won't take market risks without those considerations.

 

[OrphanSlug]

May not be a bad thing. Given the behavior of the financial sector to sell an investment product to the consumer in the open market, then at best collect an unknown fee for doing so but at worst bet against that consumer in some other private market.

 

[MrT]

The Obama administration is unveiling rules that will require that brokers who recommend investments for retirement savers meet the stricter standard that now applies to investment advisers: They must act as "fiduciaries" — trustees legally obligated to put their clients' best interests above all.….
And a broker may have to tell you when they have a conflict of interest with regard to a financial product — like receiving fees — that could prevent them from putting your interest first in recommending it

Stricter rules unveiled for brokers giving retirement advice - Yahoo Finance

Another win for the middle class. Sure it’s not as big a win for the middle class as the Great Obama Bull Market but it’s a win. But its not a win for the 15% of the middle class that got out of the stock market in 2009 and missed out on the Great Obama Bull Market.

This is overall a benefit to consumers; however, it will come with a cost. For example, many investment bankers charge a fee to their clients of about 1.5-2% for the investment advice. This rule will now force more investment bankers to enact that type of fee because they now must act as though the person receiving the advice is a client. And with the increased risk will come the increased cost.

 

[What if...?]

That's great, but at the same time, Obama wants desperately to get rid of the 15% percent tax on long-term capital gains. People won't take market risks without those considerations.

Yes they will.

Gotta get that dopamine fix.

 

[jet57]

The Obama administration is unveiling rules that will require that brokers who recommend investments for retirement savers meet the stricter standard that now applies to investment advisers: They must act as "fiduciaries" — trustees legally obligated to put their clients' best interests above all.….
And a broker may have to tell you when they have a conflict of interest with regard to a financial product — like receiving fees — that could prevent them from putting your interest first in recommending it

Stricter rules unveiled for brokers giving retirement advice - Yahoo Finance

Another win for the middle class. Sure it’s not as big a win for the middle class as the Great Obama Bull Market but it’s a win. But its not a win for the 15% of the middle class that got out of the stock market in 2009 and missed out on the Great Obama Bull Market.

The markets are soooo dangerous for retirement funds. Social security should be funded by these things in your own account. The government should guarantee certain return percentages for investment and pump them up through tax income. THAT will get people flooding to that type of retirement investment.

 

[Vern]

That's great, but at the same time, Obama wants desperately to get rid of the 15% percent tax on long-term capital gains. People won't take market risks without those considerations.

a couple of things you need to understand. Capital gains tax is already 20% for high income earners like it was under Clinton. And it was 28% under Reagan. so you'll need to explain the basis for your belief "people wont take market risks".

also I don't understand "desperately". I know he wants to but how do you define "desperately". Here's an example of how I would use it: Bush desperately wanted to invade Iraq so he kept it a secret, ignored the clear and repeated warnings about 9-11, lied continuously about WMDs and treasonously outed an uncover CIA agent who was looking into his false claims about uranium. See how that shows "desperation"?

 

[ludin]

That's great, but at the same time, Obama wants desperately to get rid of the 15% percent tax on long-term capital gains. People won't take market risks without those considerations.

eh 401k's are taxed as income not capital gains.
you are just hoping that taxes go down during that time not up.

 

[Erod]

eh 401k's are taxed as income not capital gains.
you are just hoping that taxes go down during that time not up.

Not all retirement accounts are 401Ks.

 

[Samhain]

eh 401k's are taxed as income not capital gains.
you are just hoping that taxes go down during that time not up.

Or effectively withdraw the money as appropriate to keep the tax rate low by spreading that income out, sometimes even before you expect to need it.

 

[whataboutbob]

The Obama administration is unveiling rules that will require that brokers who recommend investments for retirement savers meet the stricter standard that now applies to investment advisers: They must act as "fiduciaries" — trustees legally obligated to put their clients' best interests above all.….
And a broker may have to tell you when they have a conflict of interest with regard to a financial product — like receiving fees — that could prevent them from putting your interest first in recommending it

Stricter rules unveiled for brokers giving retirement advice - Yahoo Finance

Another win for the middle class. Sure it’s not as big a win for the middle class as the Great Obama Bull Market but it’s a win. But its not a win for the 15% of the middle class that got out of the stock market in 2009 and missed out on the Great Obama Bull Market.

No, this was a power grab by the DOL.

The ignorance of their argument is that the investments in IRA's should all be fee based and not commission based. For investors that have bond ladders in their portfolios, there is going to need to be clarification otherwise they are going to have to pay on going fees for the bonds in their portfolios (or at least on new ones added as others mature).

This is being done as a favor to the large investment banks who prefer to rape their clients with fees on assets each year. Fee based accounts can be good for those that are trading more frequently, but they are not necessarily in the best interests of clients who are in retirement (or near it).

That said... there are a lot of advisers that use commission products that are not suitable. So I get the point the DOL is making regarding commission products... but not all commission products are bad. Most bonds are better served paying a one time fee to an adviser rather than an on going charge to the client every year.

 

[whataboutbob]

Not all retirement accounts are 401Ks.

Traditional 401k, 403b, IRA's are all taxed as ordinary income. Unless the retirement account is a ROTH... it is taxed as ordinary income.

 

[tres borrachos]

This is overall a benefit to consumers; however, it will come with a cost. For example, many investment bankers charge a fee to their clients of about 1.5-2% for the investment advice. This rule will now force more investment bankers to enact that type of fee because they now must act as though the person receiving the advice is a client. And with the increased risk will come the increased cost.

You beat me to it.

 

[Chomsky]

That's great, but at the same time, Obama wants desperately to get rid of the 15% percent tax on long-term capital gains. People won't take market risks without those considerations.

That I bolded remains to be seen.

 

[Carjosse]

eh 401k's are taxed as income not capital gains.
you are just hoping that taxes go down during that time not up.

Not everyone's retirement savings are in 401ks, actually many people finance retirement with investments that they then have to pay capital gains on.

 

[ludin]

Not everyone's retirement savings are in 401ks, actually many people finance retirement with investments that they then have to pay capital gains on.

then those are not retirement account but typical investments.
retirement accounts have a specific financial qualifications to meet.

they are usually tax differed until you withdraw them.

you can finance your retirement in different ways but retirement accounts are specific types of accounts.

I have no issues with this rule. brokers should be up front and honest with their clients money.
as a broker they are supposed to look out for their clients money as well not the vehicle to make
themselves the most money.

 

[Vern]

This is overall a benefit to consumers; however, it will come with a cost. For example, many investment bankers charge a fee to their clients of about 1.5-2% for the investment advice. This rule will now force more investment bankers to enact that type of fee because they now must act as though the person receiving the advice is a client. And with the increased risk will come the increased cost.

You may be right because my broker (a large chain) where I have an account wanted me to transfer some of my 401K to his account. He gave a nice presentation of what he thought a balanced portfolio looks like. He then said I could just make the trades for the usual fee (more that 30 times Scottrade prices) or they could actively manage it for a flat 2%. They gave me a choice but both of them sucked. So I declined.

 

[Harry Guerrilla]

This is overall a benefit to consumers; however, it will come with a cost. For example, many investment bankers charge a fee to their clients of about 1.5-2% for the investment advice. This rule will now force more investment bankers to enact that type of fee because they now must act as though the person receiving the advice is a client. And with the increased risk will come the increased cost.

For your average person, it should be fine.
Most folks should be in broad market, low cost mutual funds and etf's.
Negating the need of anything else, other than rebalances at strategic life points.

The broker should be helping for a fee, not shilling for a fee.

 

[Thrilla]

The Obama administration is unveiling rules that will require that brokers who recommend investments for retirement savers meet the stricter standard that now applies to investment advisers: They must act as "fiduciaries" — trustees legally obligated to put their clients' best interests above all.….
And a broker may have to tell you when they have a conflict of interest with regard to a financial product — like receiving fees — that could prevent them from putting your interest first in recommending it

Stricter rules unveiled for brokers giving retirement advice - Yahoo Finance

Another win for the middle class. Sure it’s not as big a win for the middle class as the Great Obama Bull Market but it’s a win. But its not a win for the 15% of the middle class that got out of the stock market in 2009 and missed out on the Great Obama Bull Market.

win for the middle class?....umm, middle class folks aren't known for having investment brokers.

it's simply a "win" for investors who go though brokers....and it's a policy i agree with.

 

[Vern]

win for the middle class?....umm, middle class folks aren't known for having investment brokers.

it's simply a "win" for investors who go though brokers....and it's a policy i agree with.

My parents had a broker. they were middle class. And they had an impressive portfolio for people who earned what they earned. I know brokers make money on certain funds and annuities. My parents have several of one firm's funds and two annuities. SS and their pensions were the only annuity they needed. I don't know if the rule would have applied to them but they were clearly milked for fees.

 

[Thrilla]

My parents had a broker. they were middle class. And they had an impressive portfolio for people who earned what they earned. I know brokers make money on certain funds and annuities. My parents have several of one firm's funds and two annuities. SS and their pensions were the only annuity they needed. I don't know if the rule would have applied to them but they were clearly milked for fees.

I'm certain some middle class/ upper middle class folks have brokers..... it's just not true when speaking of the middle class in general.

in any event, I believe a broker should be treated as fiduciary for the client... it makes no sense not to treat them as such.

 

[radcen]

Overall, and in and of itself, I see this as a positive move.

 

[Vern]

there just is no scrap or crumb for the middle class that republicans wont try to take away.

The U.S. House of Representatives voted on Thursday to repeal a Labor Department rule aimed at protecting retirement savers from profit-hungry brokers, a largely symbolic move that President Barack Obama has threatened to veto.

https://www.yahoo.com/news/house-vo...t-rule-obama-threatens-203619282--sector.html