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Extra Vigilance Required with Rollback of Fiduciary Rule

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With the Trump administration signalling it will roll back the Department of Labor’s proposed “fiduciary rule” for retirement accounts, it’s a good time for retirees to examine how their funds are being managed. Are your accounts being overseen by a fiduciary like Richard C. Young & Co., Ltd., that is required to put your interests ahead of theirs, or are you doing business with a brokerage strictly focused on distributing securities among its clients and reaping commissions and fees along the way? Michael Wursthorn writes at the Wall Street Journal:

President Donald Trump’s move to roll back the Obama-era fiduciary rule amounts to a reprieve for parts of the financial-services industry and puts the onus back on retirement savers to avoid conflicts by stockbrokers.

The executive action, backed by pockets of Wall Street but excoriated by consumer advocates, aims to give individuals more investment choices and businesses the opportunity to offer them. At the same time, some brokerages have said even if the rule didn’t stick, they intend to embrace some of its tenets as good business practices.

While Friday’s order gives the Labor Department discretion over whether to revise or rescind the rule, the move is expected to delay the April 10 implementation deadline.

With the rule effectively on hold, if not dead, retirement savers can be pitched products that are in line with their needs and risk tolerance but that yield a higher commission for brokers, such as with certain types of annuities and some mutual-fund share classes. Critics of the rule have long contended it would punish smaller savers in the form of less access to financial advice, put heftier fees on those who trade infrequently and would be costly for brokerages to implement, especially smaller firms.

Read more here.

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.

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