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DOL Fiduciary News: October 3, 2017

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Fiduciary Rule Creating Opportunities for Advisers to Small Plans

PLANADVISER | October 02, 2017

The Department of Labor’s (DOL) pending fiduciary rule is just one of many factors causing smaller retirement plans to seek out the services of specialist retirement plan advisers, says George Revoir, head of distribution for John Hancock Retirement Plan Services in Boston.

Related to this trend, broker/dealers are enhancing their service offerings to provide non-retirement specialists with more tools and protections so that they can effectively act as fiduciaries to these plans, he says.

Many small plan sponsors are beginning to realize that the advisers currently servicing them are commission-based brokers, not necessarily fiduciaries, causing them to look for help with the fiduciary rule and participant education, agrees Chris Schaefer, head of MV Financial’s retirement plan practice in Bethesda, Maryland.

“Small plan sponsors are beginning to question what value their adviser brings to them, particularly if that adviser is not acting as a fiduciary,” says Matt Wolniewicz, president of Fi360 in Chicago. “They are now realizing that, rule or no rule, their adviser needs to look out for their best interest.”

Using Life Insurance in Retirement

Financial Advisor; October 2017 print edition

Does life insurance have a place in retirement? The answer depends on whom you ask.

One school of thought holds that retirees would be better off saving their money, especially if they’ve amassed a sizable nest egg and their children are grown and financially self-sufficient. But for many advisors, that’s not necessarily the best advice.

“That is nuts,” says Ben G. Baldwin Jr., director emeritus of Baldwin Financial Advisors, a registered investment advisor in Arlington Heights, Ill. He adds that a possible justification for dropping life insurance might be if the retiree can no longer afford the premiums. Otherwise, he says, “It is an asset that allows you to use other assets in your nest egg for retirement purposes.”

On the upside, he says the Department of Labor’s fiduciary rule is supposed to reduce unscrupulous sales of life insurance policies. The rule comes into play if the advisor gets additional compensation, directly or indirectly, from a sale of insurance that involves a qualified plan, says Rybka. “So a whole series of recommendations using life insurance are now impacted.”

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