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The fiduciary standard: Two changes

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Brenda EcheverriaOver the past year, you may have read or heard about a new rule that the Department of Labor is imposing that requires brokers to handle retirement accounts to act in the client’s best interest. The aim of the rule is to curb conflicts of interest by imposing a fiduciary standard. Under this standard, brokers who advise on retirement plans will be required to charge “reasonable” compensation and will no longer be able to consider their compensation in deciding which products to recommend. A key concept is that all advisors are required to make their clients aware of their rights to complete information on the fees they are being charged.

As of June 9, 2017, two provisions have gone into effect: (1) advisers must give advice that is in the best interests of their clients, and (2) charge reasonable compensation and avoid “misleading statements” about investment transactions and what they are being paid.

When speaking to anyone about your account, it is important to understand the product that is being suggested to you (or that you are currently invested in) and what your costs are. Member Benefits has always been transparent about our 403(b) and IRA fees.

Understanding this new rule and your rights is critical. Learn more by reading Money's article on the new fiduciary rule.

If you are thinking about making changes, request information that helps you understand all fees and/or surrender charges for any investment you are considering. Compare program features such as automatic rebalancing, flexible withdrawal options, and investment options. Most importantly, never feel pressured to move or make changes to your accounts.

If you would like more information or have specific questions, please contact our financial planners for a free one-hour consultation* or make an appointment for any of our paid financial planning services**.

Brenda Echeverria, Financial Planner

All investment advisory services are offered through WEA Financial Advisors, Inc.

*Consultation is free; however, if you choose to invest in the WEA Tax Sheltered Annuity or WEAC IRA program, fees will apply. Consider all expenses before investing. Must be a WEAC member, Wisconsin public school employee, or current participant in a Member Benefits program to qualify for the free consultation service.

**Fee-based services: Must be a WEAC member, Wisconsin public school employee, or current participant in a Member Benefits program to participate. Family members may also be eligible. Call for details. Wisconsin residency required.