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Is the fiduciary rule dead?

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  •  Panscan 
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    Status: Resident
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    Joined: 03/18/2017
    WCICon18

    Is there a standard that your accountant won’t mess up your taxes? Do we think all accountants act in their clients best interests?

    What is the point of something like this and how do you enforce it? If I truly believe the high load, high fee funds are the best thing for the client and that they will outperform their fees am I not acting in the clients best interest? Obviously most of us wouldn’t agree but that doesn’t make it criminal or that the person isn’t acting in their perception of the clients best interests.

     

    It’s like thought persecution. Never-ending rabbit hole to more regulation.

    #180367 Reply
     Panscan 
    Participant
    Status: Resident
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    Joined: 03/18/2017

    A physician giving narcotics for chronic back pain, most of us would argue against that, does it mean they are working against their patients best interests? Not necessarily.

     

    #180369 Reply
    Molar Mechanic Molar Mechanic 
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    Status: Dentist, Small Business Owner
    Posts: 261
    Joined: 10/29/2017

    Trump was trying to kill it, but the courts got to the rule first. Either way it’s dead.

    You cannot make an advisor pick a good fund, but many funds have multiple share classes. That means you can buy the exact same mutual fund with at 5.75% load or a 2% load. Neither it’s good, but the rule could have limited some of the worst abuses.

    #180370 Reply
     bean1970 
    Participant
    Status: Physician
    Posts: 350
    Joined: 07/12/2017

    when the rule was gearing to go into effect, our institution had seminars for us to attend given by the various plan administrators for our retirement accounts.  this was my takeaway

    1) The rule would greatly increase our plan fees.  up to 5x. some even more.

    2) The rule would limit our investment options, Each  financial institution (our institution offer like 4-5 different places you can set up your retirement account with like Fidelity, TIAA, MetLife, Valic, etc.) would no longer offer investment options that were not theirs (ie you couldn’t buy vanguard funds into your Valic account anymore)..the rule would prevent free market investing because of some red tape and liability as the rule applied.

    3) anyone with a small business plan (if that applied to them) would likely have to fold. it would be too costly.

    4) fiduciaries are still around and still will be present. Rule has nothing to do with that.

    #180371 Reply
     Tim 
    Participant
    Status: Accountant
    Posts: 809
    Joined: 09/18/2018

    @panscan,
    You mentioned two examples: one a fund and the other narcotics. In each case, you had a qualification, the intent is the issue.
    I would suggest some fiduciaries were more concerned about their income than the client, the same with some narcotics.
    Yes, some are fraud from the word go. Some would just call it business.

    #180415 Reply

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