West Suburban Patriots

an independent Tea Party group in DuPage County, IL

Obama Sets Stage to Nationalize Retirement Accounts

If you like your adviser you can keep your adviser..., maybe. If you like your IRA, you can keep your IRA... maybe. The Department of Labor (DOL) plans to change the rules for retirement advisers. 

Recent stories:

  • Guest opinion: The federal government wants to be your investment adviser billingsgazette.com
  • If You Like Your 401(K), You Can Keep Your 401(K): Obama Sets Stage to Nationalize retirement account joemiller.us
  • White House rules on financial advisors draw scrutiny youtube.com


We sent information about this in our July 9, 2015 WSP e-mail alert.  They were accepting comments then.  That comment period ended on Jul 21, 2015.  They held a hearing.  And have now opened a new comment period ending on Sep 21, 2015.  The Currently open docket is available at: http://www.regulations.gov/#!documentDetail;D=EBSA-2010-0050-0204  in the upper right there is a button to click to “Comment now.”  Part way down the right column there is a link to view comments already submitted.  Our fear is that these new rules will do to the independent advisors what banking rule changes did to local savings-and-loans and small banks.  Did you notice all the mergers? 


If you like your adviser you can keep your adviser..., maybe. 

[from WSP 7/9/2015]

They say “follow the money” – in this case follow who controls the money – or more precisely, who determines who determines what you do with your money.  Huh?

There is a rule proposed by the Department of Labor to regulate financial advisers that will result in no real choice for small to mid-sized investors.  


A little background:

Financial advisers are currently regulated by the Financial Industry Regulatory Authority (FINRA) which oversees the activities of brokerage firms, and their registered representatives.  The Securities and Exchange Commission (SEC) regulates investment advisers and their investment adviser representatives.

The Department of Labor (DOL) administers a variety of federal labor laws to guarantee workers' rights to fair, safe, and healthy working conditions, including minimum hourly wage and overtime pay, protection against employment discrimination, and unemployment insurance.  Via the ERISA law the DOL has some authority over certain pension/retirement accounts – not ALL.

The DOL has released hundreds of pages of proposed regulations to regulate financial advisers.    What authority does the DOL have to regulate this industry? 


What will be the results of these proposed regulations? 

The new regulations will require all financial advisers to meet “fiduciary” standards.  Most already do.

A fiduciary duty is defined as a legal duty to act solely in another party's interests.  In other words they must do what is best for the client.  They should recommend an investment based on its value and how it fits with the client’s needs, desires, risk tolerance, etc. rather than considering the commission.   The problem is – Who defines (or re-defines) what is in the client’s best interest? 

There is also the overhead and restrictions of the proposed regulations that will result in many financial advisers leaving the business:

  • The regulations will raise the liability exposure of the financial advisers.
  • The regulations will raise cost significantly due to new reporting requirements.
  • The regulations will reduce the options for how financial advisers are compensated.

Do you want to choose who you trust to help you make your financial decisions? 

Or do you think “Uncle Sam” via the Department of Labor should limit your options?


More background information:

This was also sent in an e-mail alert on Aug 31, 2015

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