The View from the (DOL) Trenches
November 7, 2016 by Kerry Petcher
Just a few years ago, mutual fund companies happily anticipated the “rollover opportunity”—a windfall that would come from managing the trillions of dollars in Boomer savings that were pouring out of 401(k) plans and into retail IRAs. “Capturing Rollovers” was their mantra.
Asset managers’ euphoria ended last spring, however, when the Labor Department released the final version of its conflict-of-interest rule. Starting in April 2017, the business of selling mutual funds to retail IRA clients will be held to nearly the same ethical standards as selling mutual funds to participants in qualified plans.
Financial services companies, especially the brokerage sector where employee-advisors earn commissions from manufacturers on the sale of funds and annuities, are now adjusting to the new rule. The actions of these distributors will have a big impact on the asset managers and insurers who rely on them to market their mutual funds, ETFs and annuities.
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