‘Fiducuary rule’ claims first victims

Today a major national investment firm announced that it will no longer offer the choice of commission-based mutual funds in its retirement plan accounts. The change comes in response to the ‘fiduciary rule’ recently enacted by the Obama administration. This firm, Edward Jones, id the first to take such action. The firm hopes to convert the owners of these investment accounts to fee-based customers.

Assuming that other investment firms will follow this lead in the months to come, what is the effect on individual workers?

I suspect that many firms will reconsider their retirement plan options when the investment choices are eliminated. When they do, they may find that they need to hire an accountant or fee-based adviser because the usual commission-based financial advisers are no longer interested in consulting without the likelihood of compensation. The option of telephone or web-based investment options is a possibility, but I don’t think that most employers are comfortable handling 100% of their retirement plan work this way.

Individual investors, I suspect, will mostly transfer to no-load investments without a financial adviser’s help.


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