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Author Topic: So, the Dept of Labor basically decided my broker needs to charge me more  (Read 394 times)

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Stephen Greene

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"Dept of Labor Fiduciary Duty" something or other, shoved through under dipsh*t Obama - and now it's going into increase my fees to my broker

How does the Dept of Labor decide my broker needs to increase it's duty to me on my IRA, and charge me more?

Is someone in congress going to get this on the chopping block I hope?

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HawgWild

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Vantage 8 dude

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"Dept of Labor Fiduciary Duty" something or other, shoved through under dipsh*t Obama - and now it's going into increase my fees to my broker

How does the Dept of Labor decide my broker needs to increase it's duty to me on my IRA, and charge me more?

Is someone in congress going to get this on the chopping block I hope?
The main point is that instead of possibly charging you a commission under the "fiduciary rule" most investment company's have opted to charge a set fee for investment advice. Obviously eliminates any real choice the client has in determine how his advisor is to be paid. Supposedly this method of charging for services rendered will eliminate any supposed conflict of interest the advisor may have it. Whether that's truly the case is obviously open to debate.

Like it or not, and I know more than a few advisors AND their clients who aren't happy in the least, the Washington "gods" have spoken.
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Karma

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"Dept of Labor Fiduciary Duty" something or other, shoved through under dipsh*t Obama - and now it's going into increase my fees to my broker

How does the Dept of Labor decide my broker needs to increase it's duty to me on my IRA, and charge me more?

Is someone in congress going to get this on the chopping block I hope?


Before the broker could put his interest before yours. If he decided he should have more of your money and you less, then he could legally do so. Now he can't. That's a bad thing?
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Vantage 8 dude

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Before the broker could put his interest before yours. If he decided he should have more of your money and you less, then he could legally do so. Now he can't. That's a bad thing?
Not the total point. While the whole idea of putting the client's interest(s) is an obviously good thing, unfortunately in many cases the actual best thing for some clients was to charge a "transactional fee". This is particularly the case when an investor typically does little trading/business. Unfortunately now most, if not all, investment firms have decided to charge a flat annual fee-usually paid quarterly. That really hurts the smaller investor whose account is either dropped by the firm for being deemed "unprofitable" or the client as cited above how may actually be charged more now that he/she is hit with a fee usually determined by a % of assets under management.
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Vantage 8 dude

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"Dept of Labor Fiduciary Duty" something or other, shoved through under dipsh*t Obama - and now it's going into increase my fees to my broker

How does the Dept of Labor decide my broker needs to increase it's duty to me on my IRA, and charge me more?

Is someone in congress going to get this on the chopping block I hope?
Ultimate it comes down to this: "baby needs new shoes". ;) ;D
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McKdaddy

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FINRA will eventually want in on the action ("why is the DOL regulating our advisors and not us?") and apply these standards to NQ accounts as well.  My firm, and probably several others, have already applied these rules to NQ accounts to attempt consistency across all accounts.  We still offer commission-based accounts, along w/ fee-based accounts, but with more disclosures than before (thankfully these disclosures seem easier to read/understand by clients).

Our biggest affect, not directly DOL-related but completed along w/ prep for the DOL deadline, was doing away w/ 12b-1s.  WAY overdue.

We've offered fee-based accounts so long as I've been in this biz, but for some firms doing so is a first and 2 of my buddies w/ those firms state the convos w/ some clients have at times been "interesting".
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Stephen Greene

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Before the broker could put his interest before yours. If he decided he should have more of your money and you less, then he could legally do so. Now he can't. That's a bad thing?

Not sure if serious

If the broker put his interest before me, I'd ditch said broker.

I don't need the govt deciding whether my broker is evil or not. Is that your thing? You need to govt to make that decision for you?
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Karma

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Not sure if serious

If the broker put his interest before me, I'd ditch said broker.

I don't need the govt deciding whether my broker is evil or not. Is that your thing? You need to govt to make that decision for you?
The average person has no idea if his broker is putting his interest before the client. The fact that you feel brokers will have to raise their prices because of this regulation means that they are going to lose money as a result of putting their client's interest first.

I have a series 7, and I don't have a broker. i just think those that do want one deserve one that doesn't put his own interests first.
« Last Edit: June 26, 2017, 08:51:56 pm by Karma »
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Vantage 8 dude

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Not sure if serious

If the broker put his interest before me, I'd ditch said broker.

I don't need the govt deciding whether my broker is evil or not. Is that your thing? You need to govt to make that decision for you?
I wholeheartedly agree with your sentiments concerning a financial advisor's interest. Unfortunately we know that human nature being what it is the temptation(s) to do something not necessarily in the client's best interest is always there. Not sure whether or not this whole legislation will necessarily end up being the best for all involved, government actions being what they often are. However, I do believe the INTENT of the new guidelines are good. 
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HawgWild

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Back in the 1990s I had a co-worker whose son had gone to work for a Little Rock investment firm shortly after graduating college. I'd ask her if her son knew of a good stock in which to invest. She told me "Ammonia Hold". It was a Lonoke company that had developed a product that could be used to ameliorate ammonia produced by poultry farms, hog farms, landfills etc. and help break it down. Sounded promising to me so I made about three buys of stock for my IRA. Turns out the stock price went south, the company was sold and the last share price I recorded was $0.025 pps. Then, a couple of years later I read where the investment company was fined by the SEC. Turns out they'd been paid by AMD to promote their stock.
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Biggus Piggus

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You needed a better investment selection process. If you ask someone for a stop tip and then act on it with no other research, you get what you pay for. You did nothing to ascertain whether the investment was suitable for you and your financial situation and goals. You did nothing to understand the company's fundamental qualities and risks.
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BigBrandonAllenFan

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Ultimate it comes down to this: "baby needs new shoes". ;) ;D

That was along the lines of my first thought.
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HawgWild

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You needed a better investment selection process. If you ask someone for a stop tip and then act on it with no other research, you get what you pay for. You did nothing to ascertain whether the investment was suitable for you and your financial situation and goals. You did nothing to understand the company's fundamental qualities and risks.

Seems so obvious now.
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Karma

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You needed a better investment selection process. If you ask someone for a stop tip and then act on it with no other research, you get what you pay for. You did nothing to ascertain whether the investment was suitable for you and your financial situation and goals. You did nothing to understand the company's fundamental qualities and risks.
While true, the brokerage company still acted improperly.
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HawgWild

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Interesting article in the Arkansas Times on 401 (k) plans, investment fees, etc. It's a long read but informative.

https://www.arktimes.com/arkansas/youre-doing-your-401-k-wrong/Content?oid=7555648
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HiggiePiggy

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I have my 401k in dodge and cox, and Trowe Price.  So far they have done pretty good for me.
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