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Major Changes Coming for Retirement Investments

Brokers and other financial planners who manage retirement investments are in for a big change.  The United States Department of Labor (“DOL”) has proposed a rule targeted at forcing brokers to very clearly put the client’s interests above their own.

The rule was first proposed in 2010 and has gone through many variations since.  The current version of the rule was published last Spring and is thought to be near-final.  It is currently under review by the Office of Management and Budget, and is expected to be completed by April.  Proponents of the proposed rule are pushing to have the rule enacted before the end of 2016 – and before President Obama leaves office.

This fiduciary rule seeks to reduce conflicts of interest for financial advisors working with 401(k) and IRA retirement accounts.  Brokers who are currently not subject to the strict requirements of acting as a “fiduciary” will be deemed as such under the new rule.  Although the final terms are not set, any iteration of the rule will have significant impact on, among other things, client meetings, products offered, and the way fees are charged.

There is a lot of opposition to the proposed rule.   Many groups have already stated they may seek legal intervention if the rule is enacted, including the U.S. Chamber of Commerce and Primerica.  Congress will also have the opportunity to oppose the rule; it has 60 legislative days to adopt a joint resolution of disapproval after the rule is enacted.

Stay tuned!


Kelly A. Pressler is an associate and practices General Civil Litigation and Municipal Litigation.  She can be reached by phone at 866-303-9595 toll free or 845-764-9565 and by email.

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