Over the past couple of days, the WSJ has published multiple articles describing that the US government plans to enact new laws that will affect retirement accounts (IRA, 401k, etc). The majority of the laws impact financial advisors and what they can recommend to clients, but the laws could also impact self-directed investors such as DGIers.
Some articles WSJ and SA articles:
http://www.wsj.com/articles/new-governme...1459762202
http://www.wsj.com/articles/u-s-unveils-...1459936802
http://www.wsj.com/articles/new-retireme...1459936800
http://seekingalpha.com/news/3171549-wsj...ment-rules
I know that some WSJ articles are behind paywalls, so I've included some of the most important quotes from the articles below.
As many of us know, one benefit of DGI is the low fees. We pay ~$5 once to buy stock, and there are no more fees associated with that stock purchase for the rest of our life. The government's proposed 1% annual fee is absolutely ridiculous. I will wait to see how things shake out, but I may need to change which brokerage manages my IRA.
Some articles WSJ and SA articles:
http://www.wsj.com/articles/new-governme...1459762202
http://www.wsj.com/articles/u-s-unveils-...1459936802
http://www.wsj.com/articles/new-retireme...1459936800
http://seekingalpha.com/news/3171549-wsj...ment-rules
I know that some WSJ articles are behind paywalls, so I've included some of the most important quotes from the articles below.
Quote:Many brokerage firms plan to steer IRA investors who now pay commissions into accounts that charge annual fees of up to 1% or more.
Quote:Some brokerages and financial-advisory firms have warned that they may shed investors with smaller nest eggs—such as, $50,000 or less—because these accounts may no longer be profitable for the company to serve under fee-based arrangements. Others may shift small-balance clients into new stripped-down fee accounts, including with affiliated automated “robo” advisory services.
Quote:Some brokers will continue to accept commissions. But to do so, they must ask clients to sign a “best interest contract” that requires the adviser to act in the investor’s best interests and includes information about the firm’s conflicts of interest. They must also make more detailed disclosure about costs and fees available to investors who request it.
Quote:Firms will be required to acknowledge their fiduciary status and make “basic disclosures of conflicts of interest” by April 2017. They will have until Jan. 1, 2018, to comply with the rule’s other provisions and disclosures.
As many of us know, one benefit of DGI is the low fees. We pay ~$5 once to buy stock, and there are no more fees associated with that stock purchase for the rest of our life. The government's proposed 1% annual fee is absolutely ridiculous. I will wait to see how things shake out, but I may need to change which brokerage manages my IRA.