Inherent to acting in a client’s best interest is ensuring costs are reasonable, an ERISA concept brokers need to understand
Apr 11, 2016 @ 12:01 am | By Greg Iacurci | Investment News
What is “reasonable” compensation? It’s a question brokers may not have considered prior to the Labor Department’s recentpush to regulate investment advice in retirement accounts.
However, brokers need to start paying attention, because this seemingly simple question will have a big influence on the way they are able to do business in qualified retirement accounts going forward.
The Department of Labor on Wednesday issued its landmark “fiduciary” rule, which says intermediaries giving investment advice in accounts such as 401(k) plans and IRAs must adhere to a “fiduciary” standard as laid out under the Employee Retirement Income Security Act of 1974. Until now, brokers have been able to operate under a less-stringent “suitability” standard.
Our firm has been using Blue Vault from the first year it was available.
We have found it to be a valuable tool to verify what wholesalers tell us and to dig deep into how the reported investments are really performing.
We appreciate that Blue Vault has expanded its services from initially covering REIT's to now also including BDC's.
Our clients also appreciate that we conduct this additional due diligence on their behalf.