There’s new pushback on the proposal that IRA advisors be brought under the fiduciary standard. The study used to state that such a rule would raise fees significantly was conducted by the Oliver Wyman consulting firm in 2011.
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It reportedly found that the Department of Labor’s proposed definition of a fiduciary would raise the cost of advice for IRA accounts from 75% to 195%. The report says such increases in fees would prohibit access to qualified financial advice on IRA accounts by middle income and low income individuals.
Proponents of the fiduciary standard extension to IRA advisors say that the study’s methodology is flawed. That revelation is recent because the study originally did not reveal the data it used in coming to its conclusions.
More data is needed before an adequate debate of the rule’s merits can be conducted. Opposition to the study’s conclusions says that people save more if they receive advice but that the study’s tactics were misleading and dishonest.
Phyllis Borzi, assistant secretary for Employee Benefits Security at the Department of Labor says that the rule would do away with the regular basis and primary basis requirements so that retirement plan participants as well as the companies sponsoring the retirement plans
would receive greater protection.