As reported by Investment News and other sources, the Fiduciary Rule set forth by the Department of Labor (DOL) last year may be off the table. The rule was vacated by a Circuit Court decision on March 15, 2018. The DOL had until April 30 to file an appeal, but the deadline passed without any further action. They have until June 13 to petition the U.S. Supreme Court, though many feel that’s unlikely to happen given the DOL’s disregard for the appeal date.
In a measure designed to protect the interests of retirement investors, the Fiduciary Rule assigned fiduciary responsibility to advisors, brokers, or any other such individuals or entities, tasking them with always acting in the best interests of their clients. The goal was to prevent less-than-scrupulous investments in high-risk, high-reward vehicles that were more likely to provide broker commissions than positive returns for investors. The likely end of the Fiduciary Rule ultimately stemmed from a perceived overstepping by the DOL in attempting to enforce the stated initiatives; the Securities and Exchange Commission (SEC) has been cited as a more appropriate governing body for such regulation.
As investment providers move forward without the weight of fiduciary responsibility, the onus of due diligence falls back on investors. You’re typically inclined to benefit from research and an evaluation of your risk tolerance when considering an investment strategy, but the importance of these measures is seemingly exacerbated by the apparent defeat of the Fiduciary Rule. In many ways, self-directed retirement enables investors to avoid the potential conflicts of interest that the rule was meant to eliminate.
Please keep in mind that your trusted financial team—your accountant, your investment provider, etc.—is always welcome in fulfilling your objectives with New Direction IRA (we will not share your account information without express permission from you). For more information about alternative IRA investments, please don’t hesitate to contact our office.