Thanks to the Department of Labor, you can finally get paid for 401(k) advice
The summer of 1999 was when I opened my first investment advisory account for a company 401(k) retirement plan participant. Six months later, I left the broker-dealer world and opened an RIA firm in order to get paid for the advice. Since that time, I have been teaching, writing and cajoling investment advisors from all over the United States to give strong consideration to providing investment advice to their existing individual company retirement plan participant clients.
Do you have any clients that are currently employed? If so, the new Department of Labor rules announced last week will finally encourage investment advisors to start providing a fiduciary level of investment advice to their clients with company retirement plan accounts.
Read the headlines or the summaries of the new rules. But don’t come to the same boring practice management conclusions as everyone else in your firm.
Fiduciary investment advice for an IRA will soon be the standard. The new best interest contract spells out legal liability for fiduciary violations.
Don’t let this kind of language scare you. There is a huge investment advisory opportunity that comes from the new Department of Labor rules. Become the fiduciary investment advisor of record for existing clients company retirement plan accounts now. This is a decision that your client makes; not the company retirement plan sponsor or provider.
Time to Get Paid
For years, I have heard in person, on the phone or read in an e-mail from investment advisors who have several clients that he or she provides “free” advice on their company retirement plan account menu.
If I had a nickel for every time I have heard about that arrangement with key clients and their advisors, I would not have time to write this article. I would be too busy with the intricate design of my custom-built yacht. No more free company retirement plan advice for clients. If I knew how to set up a hashtag with that phrase on twitter I would.