Reality versus the DOL Fiduciary Proposal
July 7, 2015 by NAFA
Facts about the current financial state of Americans and today’s planning environment
Consumer Assets vs. Advisor Minimums
$34,000 = IRA median value1
$30,000 = 401(k) median value1
$1,000,000 = median fee-based advisor minimum required assets2
79 = percentage of Hispanic and African-American households with assets under $100,0001
9 = percentage of financial advisors who don’t require at least $100,000 in minimum assets and/or a $3,000 minimum annual fee2
Commissions vs. Fees
54 = percentage of Mass Affluent consumers stating they would rather pay a commission than a fee3
70 = percentage of respondents from a study cited in the White House Economic Council memo stating that it was worth accepting a lower return if they had the ability to meet with and talk to a broker4
0 = number of studies cited in the White House Economic Council memo showing that bans on paying commissions have been beneficial5
Fiduciary-Only vs. Suitability
0 = evidence of actual abuse caused by the Suitability Model shown by Department of Labor Assistant Secretary Phyllis Borzi in her testimony on July 26, 2011, to the House Committee on Education and the Workforce, Subcommittee on Health, Employment, Labor, and Pensions6
0 = evidence provided by the Consumer Federation of America to support its allegation that the lack of a fiduciary-only standard means that “investors suffer real financial harm”7
Commission Payouts vs. Fee Payouts
$6,000 = average total commission income paid to an annuity agent over 25 years assuming 5% growth and 5% payout8
$19,712 = average total fee income paid to a fee-based advisor over 25 years assuming 5% growth, 5% payout and 1% annual fee8