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Overhaul of Fiduciary Rules for Retirement Advisors Proposed by DOL (Department of Labor)

The Department of Labor has introduced a proposed rule with the aim of broadening

the scope of who qualifies as an investment-advice fiduciary. This would include

individuals advising retirement plan participants and owners of individual retirement

accounts (IRAs) for a fee, potentially encompassing broker-dealer and asset manager

salespeople. The rule seeks to address concerns about potential conflicts of interest,

where advisors may prioritize their own interests over those of their clients, especially

when recommending non-securities within retirement plans. Significantly, the proposed

rule introduces a simplified three-part test, eliminating the need for a mutual agreement

between the advisor and the advise, and expands the definition of a fiduciary to

include those making regular, client-specific recommendations. Critics argue that this

could lead to increased responsibilities and liabilities for salespeople and result in

additional disclosure requirements for existing fiduciaries, potentially driving up costs.

Furthermore, the proposal aims to regulate commodities and insurance products like

fixed index annuities, areas not covered by current regulations. The Department of

Labor's efforts to enhance investor protection in the realm of retirement planning have

persisted despite industry opposition. It's important to note that the proposed rule may

undergo revisions before becoming finalized.


MATERIAL DISCUSSED HEREIN IS MEANT FOR GENERAL ILLUSTRATION AND/OR INFORMATIONAL PURPOSES ONLY AND IT IS NOT TO BE CONSTRUED AS TAX, LEGAL, OR INVESTMENT ADVICE. ALTHOUGH THE INFORMATION HAS BEEN GATHERED FROM SOURCES BELIEVED TO BE RELIABLE, PLEASE NOTE THAT INDIVIDUAL SITUATIONS CAN VARY THEREFORE; THE INFORMATION SHOULD BE RELIED UPON WHEN COORDINATED WITH INDIVIDUAL PROFESSIONAL ADVICE.

BEFORE MAKING ANY INVESTMENT DECISION, AN INVESTOR SHOULD CONSULT WITH A FINANCIAL PROFESSIONAL TO DETERMINE IF THE INVESTMENT IS APPROPRIATE. OR CONDUCT THEIR OWN DUE DILIGENCE BEFORE MAKING ANY FINANCIAL DECISIONS. ALL INVESTMENTS INVOLVE RISK, INCLUDING THE POTENTIAL LOSS OF PRINCIPAL INVESTED.



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