Jonathan Clements: Unheard Of

Ted

FYI: TALKING TO A BROKER or insurance salesman? Here are 10 things you’ll likely never hear:
Regards,
Ted
http://www.humbledollar.com/2017/09/unheard-of/

msf

TALKING TO A BROKER or insurance salesman? Here are 10 things you’ll likely never hear:

1. 'Wow, your 401(k) has great low-cost institutional funds. There’s no way you should roll that money into an IRA."

I had to double check that the date of this column really was after Jun 9, 2017. 'Cause that's when the DOL fiduciary rule kicked in for IRA rollovers.

Maybe you won't hear a broker saying that you should keep your money in a 401(k), but you won't be hearing brokers recommending IRA rollovers if they can't demonstrate that a rollover would be in the best interest of the customer.

From American Funds:
https://www.americanfunds.com/advisor/tools/policy-spotlight/dol-best-interest-contract-article.html

Under the DOL fiduciary rule, which took effect June 9, financial advisors who recommend that a client roll over a 401(k) into an individual retirement account (IRA) are considered fiduciaries. [Brokers who offer advice on rollovers are considered advisors here, and are thus held to the fiduciary standard.]

Fiduciary Requirements for Advisors Recommending 401(k) Rollovers

Under the fiduciary rule, which took effect on June 9, advisors must recommend a rollover only if it is in the client’s best interest. As part of this responsibility, advisors will need to consider:

• Fees and expenses associated with both the plan and the IRA
  
• Available investments under both
  
• Whether the employer pays some or all plan expenses

Here's one projection of the impact on rollovers, from Investment News Sept. 8, 2016:
"DOL fiduciary rule could cause half of potential IRA rollover assets to stay put: Report"