B-D's Move To AUM Fees Violates DOL Rule, CFA Charges

"The CFA harshly criticized regulators for not enforcing the DOL’s fiduciary rule in the face of industry lobbyists’ repeated claims that brokerage firms are responding to the rule by shifting retirement savers into fee accounts when they would be better off in commission accounts, exposing investors to increased costs in the process. Ironically, many broker-dealers looked to curtail the use of commission-based accounts last year in order to comply with the DOL rule." The Federal government, doing for the financial services industry what they did for the healthcare industry. Made it a complicated, user unfriendly expensive mess. Geez, these educated derelicts could mess up the gas can. Oh wait...

Gee, a government mandate with unintended, potentially negative results, who would have guessed? Well, anyone with a memory would have guessed. The b/d community is being forced to move accounts into fee based accounts due to the DOL mandate. The exception requires client to sign an "exception", known as the "Best Interest Contract Exemption" which not only causes concern because it is an "exception", but because it also limits the products clients can be offered. Like so many things the government does, the regulators have never provided investment accounts, have never worked with clients, have zero investment experience, but have the ability to tell professionals how to do things the regulators have never done and have no training or experience in doing. Sorry CFA, this was brought on by the government not the broker/dealer community. You don't like, have DOL change it. We don't like it either.