Hello,
I recently was informed by my broker, during a recent account review meeting, that upcoming changes might be coming to my self directed ira retirement account because of a recent ruling coming from the Department of Labor. Although the broker could not offer me any great detail(s) during this meeting as to what the changes might be as the firm was still digesting the ruling. I am thinking this will effect 401k accounts, profit sharing accounts and most likely health savings accounts as well. I am wanting to stay away from wrap type accounts that charge a percent fee on the assets contained in the account on a quarterly and/or annual basis. From my perspective these are good for the brokerage house and bad for the investor. In the past I have paid what I felt were one time sales charges in exchange for not having ongoing account fees except for a small custodial fee of about $40.00 annually. If they change this to a wrap fee based account I could wind up paying out of pocket thousands of dollars annually. In addition, I can do nav exchanges into other mutual funds of the same family without paying new sales charges. For me this is great ... however, it must be bad for them as they apparently might wish to change things in view of the new ruling.
If you have not yet heard changes are on the way ... I'd be calling my broker to find out what they might be. I plan to stay on top of this and might possibly be looking for a new home to park my self directed ira account assets. Hopefully, if necessary, I can move the assets without having to liquidate and repurchase them.
Remember, Obama Care was suppose to be affordable. Now some insurance companies are wanting large rate increases and others are just saying no more and exiting cetrain states. In North Carolina Blue Cross Blue Shield has a pending law suit against the Fed Government for failing to pay it promissed supplement funding for it to write affordable act coverage. This will be intersting.
I feel anytime the government makes wholesale changes to things it seems I have to pay more and more from my own pocket as a result of these changes. I know health care now cost me more today than it did when I first went on Medicare about three years ago. Under my first plan I paid only $5.00 for a network office visit, now I pay $25.00 plus my Medicare PPO plan cost a good bit more today than it did three years ago.
My question .... at the moment. Are there any other posters starting to get vibes from their own brokerage firms regarding Department of Labor rulings causing changes to their self directed ira accounts?
It is probally to early in this process to do any type of analysis as to where might be the best place to park assets. However, I plan to contact Scottrade, Raymond James, Edward Jones and a few others that have neighborhood offices to find out what they might be offering along these lines for a self directed ira account(s) and the associated fees, commissions, etc.
Internet based accounts are not for me. I plan to select among those firms that provide neighborhood offices. And, yes I'll probally pay a little bit more but at least I can get in front of these folks, face-to-face, if necessary.
Old_Skeet
Comments
https://www.dol.gov/ebsa/newsroom/fsconflictsofinterest.html
(Did I mention fear mongering?) HSAs aren't retirement accounts, nor would they seem to be subject to regulation by the Department of Labor. The DOL agrees with you, which is why it designed its BICE (Best Interest Contract Exception) to enable brokers to continue using their current compensation models (loads, fees, whatever). That doesn't prevent brokers from dropping their old compensation models and blaming the regulations, though. Oy.
MFO: Conflict of Interest Rule Could Save Amerians Billions in Retirement I'm glad you wrote that last part. The change that's being referred to is federal funding of risk corridors, which was taken away by Republican legislation after the ACA went into effect. This is the legislation that Rubio was referring to when he claimed to have killed Obamacare. "PolitiFact rated his claim [of saving taxpayers $2.5B] 'mostly false'." Most load fund families allow exchanges of A shares at NAV, and allow brokerages to do this as well. The question is whether a brokerage will charge you a TF if you're not paying the load. I just checked with Fidelity (10 minutes ago) and confirmed they do not charge any fee on the exchange, at least if it meets their short term trading rule (holding the shares for at least 60 days). Fidelity certainly provides neighborhood offices. Whether they're in your neighborhood is a question I can't answer. I suspect most of the discount brokerages offer a similar service, and at less cost than you're currently paying (they offer free self-directed IRAs).
Not planning on acting on this in the next month or two ... but, I will most likely start to review this in more detail sometime during the 4th quarter of 2016. It is my understanding that new DOL regulations will not take effect until April 2017. So there is indeed time to fact find and make informed decisions. I did not want others to get caught having to make a last minute decision without having the opportunity to fully consider their options. I am thinking some brokerage houses are going to try to convert accounts like mine who have paid commissions to fee based wrap accounts. If I can keep what I've got (and that is an unknown at this point) I most likely will stay put. If not then I'll consider my options.
Thanks again for making comment.
Lawsuit Proof ?
Lawsuit against D O L fiduciary rule could delay implementation indefinitely
Outside voices and views for advisers
The lawsuit may push the rule to the next presidential administration, which could ultimately kill the rule
Jun 2, 2016 @ 2:02 pm
By Peter Chepucavage
Peter Chepucavage is an independent regulatory consultant who previously worked at the National Association of Securities Dealers and the Securities and Exchange Commission.
The lawsuit designed to stop the Department of Labor's fiduciary rule will delay implementation and, depending on the winner of the Presidential election, could equal a death of the rule.
This is particularly interesting given the Supreme Court's split, which could result in them making no decision and leaving the appeals court decision as the final word. But first D O L will have to survive a three judge panel and then possibly an en banc hearing and decision. The industry plaintiffs will make a compelling argument that they should not have to spend the resources to implement the rule until the courts have ruled upon it and may argue that they should not have to do so until the next administration is in place. But this rule has had a lot of exposure and D O L can argue, as they have, that the rule is lawsuit proof (but that's not delay proof).
http://www.investmentnews.com/article/20160602/BLOG09/160609977?template=printart