June 7, 2017
The DOL Rule, in effect, will increase costs for investors exponentially. For example: assume a $99,000 IRA that places 4 trades a year. They may pay about $300 in commission and fee annually. The DOL will force them into a 'managed platform' in which a) the client has no say in allocation/asset choice, b) receives no advice (because asset allocations are set by the model, not an advisor) and c) pays a flat fee of 1-3%. Client would then pay $990 to $2,970 annually rather than $300/yr.
IRAs, by nature, do not engage in a lot of trading, their strategy being 'buy and hold' and therefore, do not have the highest commissions other account types might have. Fees in this range will be impossible to justify and leave advisors open to the most frivolous of lawsuits for things they have no control over - if GE stock crashes, its not the advisors fault and yet the DOL makes them liable through client lawsuits for ANY real or perceived offense.
DOL Rule excludes new investors and the less wealthy from advice and further punishes them for saving/investing by over-charging so they never reap the rewards of compounded earnings - the very goal of an IRA.