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The new rule by the Department of Labor with regards to investment advice, is rather confusing. The wording of the rule leaves open questions - is the fiduciary standard on all investments or just retirement accounts? And what fee would constitute a "non-fiduciary" fee? When laws are define broadly, it places a risk on those that are not in the know, in this case - consumers. Perhaps the DOL rule isn't a win-win situation for all as it imposes a burden on consumers to protect themselves when their advisers may not.
When you can own the entire U.S. stock market for as little as 0.03% a year, it seems bizarre that someone calling himself or herself a fiduciary would charge you at least 66 times that rate. But it’s perfectly legal, says Tamar Frankel, a securities-law professor at Boston University. Acting in their clients’ best interests doesn’t require fiduciaries to sacrifice their own. “A fiduciary doesn’t have to be Mother Teresa,” she says. Fees should be reasonable, but the law doesn’t define that precisely.
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