The Department of Labor’s announcement of its long-awaited, long-debated fiduciary rule for retirement plan advice will be remembered as a milestone in the history of the industry. To put it simply, professional financial planners and advisers have achieved a victory, and the Wall Street and independent broker-dealer service models have been dealt a blow.
This fits perfectly with the political tone of the times, and in the announcement, Labor Secretary Tom Perez made the most of it. Standing in front of a backdrop that read “Protect Your Retirement, and Stop Conflicts of Interest,” he talked about the fact that so many Americans believe the system is rigged against consumers, and addressed the idea that brokerage firms and independent broker-dealers cannot serve less-wealthy plans and individuals without commissions. “I don’t believe that the only way to provide financial advice to small savers is to provide conflicted advice,” he said.
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