The Department of Labor has issued a final rule requiring retirement advisors to tell clients if they receive commissions for recommending certain products. It’s the centerpiece of an Obama administration push to set a fiduciary standard in which advisors’ recommendations must be not just “suitable” but in investors’ “best interests.”
The fiduciary standard already applies to employer-sponsored retirement plans, such as 401(k)s, governed by the Employee Retirement Income Security Act, or ERISA. However, the new rule will apply when employees seek outside advice on rolling over retirement plan assets into another investment vehicle, such as an individual retirement account.
Advice: Ask your retirement plan provider or broker how the new rule might affect your employees.