The Department of Labor has proposed that high fiduciary standards be applied to all retirement accounts, such as IRAs. This is an expansion of applying the standard to employer sponsored plans such as a pension or 401(k). As many people have their IRA managed by an investment advisor or broker, this will hold many more managers to the high standard.
Registered Investment Advisors such as New Perspectives already have a fiduciary duty to clients. That means that the advisor must always act in the best interest of the client, a higher standard than is applied to other managers such as a broker-dealer. The different business model of the broker-dealer manager may not be well suited to the fiduciary standard and they may not be able to manage IRA accounts as they have before.
In all, this is very good for investors. The higher standard, already in place for Registered Investment Advisors, will apply to more managed assets. Ask your advisor if they are held to a fiduciary standard and what that means to them.
For more information on this rule change, see this Financial Advisor article.
Independent, Fee-Only Financial Advisor
