The Biden Administration has finalized the Retirement Security Rule, expanding the definition of fiduciaries to include more financial advisers and requiring them to act in clients' best interests. This rule aims to protect investors from conflicts of interest but has sparked controversy over concerns it may limit access to financial advice for average Americans. The rule will take effect in September 2024, with full implementation a year later.
A study by Ameriprise Financial reveals that while the majority of American couples trust each other and share similar retirement goals, most have not established an estate plan. The survey, which focused on couples aged 45-70 with significant investable assets, found that many have not reached a consensus on emotionally-charged financial decisions. Marcy Keckler, a senior vice president at Ameriprise Financial, advises couples to not be intimidated by estate planning, engage professionals, celebrate completing the plan, and revisit it regularly, especially after major life events.
The approval of spot bitcoin ETFs by the Securities and Exchange Commission has made investing in bitcoin easier, but financial advisers remain cautious about the risk factor. While some advisers are open to including bitcoin in their clients' portfolios, they emphasize the speculative nature of the investment and advise against allocating significant retirement funds to it. Additionally, some advisers expect a gradual shift in attitudes towards bitcoin ETFs, similar to the evolution of gold investments after the introduction of gold ETFs in 2003. Environmental, social, and governance (ESG) investors may also be hesitant due to concerns about the environmental impact of bitcoin mining.
President Joe Biden has unveiled a proposal by the Labor Department to eliminate "junk fees" charged by financial advisers on retirement accounts. The new rule would require financial advisers to act in the best interest of account owners, closing loopholes in earlier laws. Biden specifically highlighted the impact of self-serving annuities that drain people's savings accounts. Under the rule, financial advisers who violate it would face penalties, including paying restitution and fines. The president's campaign against hidden fees aims to protect consumers and ensure fairness in the financial industry.
The Biden administration has proposed a new rule that would require financial advisers, brokers, and insurance agents who sell retirement investments and advice to act in the best interest of their clients, not their own. The goal is to protect consumers from "junk" fees and prevent unscrupulous advisers from taking advantage of clients. While there are already fiduciary rules in place, they don't cover all types of investment products or transactions. The proposed rule aims to standardize the rules for all retirement advice and products. The changes may face industry pushback, but the administration believes that retirement savers deserve consistent protection regardless of the state they live in. The proposed rule will undergo a 60-day public comment period before potential revisions and finalization.
The Biden administration is proposing a new rule to close loopholes that result in added costs for retirement investment advice. The rule aims to address potential conflicts of interest among financial advisers by requiring them to provide retirement advice in the best interest of savers rather than pushing specific investment products. The proposal would also address a loophole around advisers providing guidance on rolling over assets from a 401(k) plan into an Individual Retirement Plan (IRA). The administration's broader effort to eliminate "junk fees" includes actions to eliminate banking fees and hidden charges on cable bills, airline tickets, and hotel bookings.
Financial advisers are facing challenges in explaining the changes to the laws on required minimum distributions (RMDs) from retirement plans to their clients. The rules surrounding RMDs have become more complex due to recent legislation, including the Secure Act 1.0 and Secure Act 2.0. Confusion arises from the changes in the RMD age, with clients unsure if it is 70.5, 72, or 73. The IRS has released notices providing relief, but this has added to the confusion. The penalties for mistakes in RMD withdrawals are significant, and the rules for calculating RMDs are intricate. The key rule for 2023 is that if you were born in 1950 or earlier, you must take RMDs this year, while those born in 1951 or later do not have to. The rules for inherited accounts and Roth accounts are also complex.
Hospital tenants of Medical Properties Trust, including Steward Health Care and Prospect Medical Holdings, have hired financial advisers to refinance credit lines after recent financial struggles. Steward has hired Guggenheim Securities to refinance asset-based loans due at the end of this year, while Prospect Medical is being advised by Houlihan Lokey on a refinancing effort. Medical Properties Trust has faced questions about its exposure to Steward and Prospect after a challenging period for hospitals.
