June 1, 2017
I am a relatively sophisticated, but know many retail investors (friends, family) who are not. The DOL and the prior Administration engaged in a PR campaign to get investors to focus on whether their "advisor" owes them a fiduciary duty and the evils of conflicts of interest that brokers have. While better public understanding of each type of advisor's duty is important, it is only half the story. The press releases, and news stories that dutifully followed the narrative, never touched on what this higher duty actually costs investors. I have family members that think they're smart because they've hired a registered investment adviser, who owes them a fiduciary duty, to "manage" thier account that almost never trades. They've been shocked to learn that they're paying $1,200 a year of their $100,000 (1.2%) savings for that privilege (plus brokerage commissions / markups for the trades that do occur), instead of $9.99 (or even $50 for full service) they would pay to an "advisor" that is a broker.
Investors should have a choice, but should know what they are getting as well as how much more the "better" choice will cost them.