DoL’s Fiduciary Proposal Preserves Advice – But at What Cost?
ARLINGTON, VA — The Department of Labor’s long-awaited fiduciary reproposal claims to protect consumers from “conflicts of interest” in retirement advice – but at what cost?
While initial concerns about preserving the ability for 401(k) participants to work with the advisor of their choice on rollovers appear to be addressed in the new proposal, the new compliance regimen looks to be significant, adding cost and complexity to the process. Among other things, this includes written contracts with multiple signatures, as well as initial and annual disclosures.
“Requiring so many layers of duplicative disclosures could be counter-productive – and cost-prohibitive to offering this critical level of support to 401(k) participants at a crucial point in their retirement planning,” cautioned Brian Graff, Executive Director of the National Association of Plan Advisors (NAPA).
Long supportive of an update of the 1975 fiduciary regulations, NAPA has previously expressed concerns about the impact on the relationship between retirement plan participants and their trusted advisors and plan providers, as well as the implications for new plan formation.
Graff went on to note that, “While the devil remains in the details, it is clear that the dedicated staff at the Department of Labor have worked diligently to try and balance concerns about protecting the interests of consumers and the ability for those consumers to work with advisors of their choosing. We remain concerned that the compliance costs may outweigh the benefits, but look forward to continuing to work with the DoL to further streamline and enhance this new proposal”.
About the National Association of Plan Advisors (NAPA)
The National Association of Plan Advisors was created by and for retirement plan advisors, and today represents more than 10,000 members nationwide. Membership is also open to other retirement industry professionals who support the interests of plan advisors. NAPA is the only advocacy group exclusively focused on the issues that matter to retirement plan advisors. More information about NAPA is available at napa-net.org.
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