June 2, 2017
I lost my license from my Broker/Dealer because of the new DOL rules. I had 4 401k plans that I sold and serviced. I was no longer big enough or generated enough revenue to be cost effective for my BD. But that is a small issue compared to the impact this law is going to have on the initial and small investor. With all the BD requirements on reporting on each and every account, BD’s are raising the limits on the size of accounts they will be willing to service. My son started a IRA account with $1700 he rolled over from a prior pension plan. No BD is going to want his account. He is too small to pay the reporting fees. Where is he going to go to get advice on his future contributions, managing his account. An investor who is just starting to save in an IRA will no longer be able to be go to a securities rep and get his help. You have just eliminated all investor assistance for accounts of less than $100,000. How long does it take a start-up investor to get to that level? This DOL rule has crushed the small investor. I suspect you will see many small investors dumping their IRA’s because they can’t find anyone to help them. The market is volatile and even small investors need assistance.
Secondly, the thought that a registered rep who runs a 401k plan for an employer is somehow doing something wrong when he rolls over plan assets from the 401k to an IRA for their employees. When an employee terminates and must find a home for his 401k funds where does he turn? In the past he would turn to the person who assisted him in setting up his account, developing a strategy for his funds and was pleased with their results. Under these new rules a registered rep can’t take a rollover for an individual an assist him in setting up and managing his IRA. This is a ridiculous rule. The thought that the RR is double dipping the insured by getting paid while he was in the 401k, somehow double charges by getting paid when he rolls the funds to IRA is ridiculous. Who in the right mind thinks up this stuff. A RR spends time for all these services they perform and should receive reasonable compensation. Reasonable compensation is determined by the client, not by big brother. Disclosures yes, dictated by Gov’t NO!
There are many issues with this rule, these are two that need to be resolved and soon. This law hurts the people the Gov’t thinks they defending.
Steve Van Scoik, CIC
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