A Wendy’s Wednesday Whimsy

Are you subscribed to Fred Reish’s Insights? If not, you should be.

Normally, when I seek legal counsel for anything, and I compare the hourly rate to my own, my first thought is, I am so in the wrong profession. In my next life, I intend to be an intellectual property attorney. Seriously, that’s how far gone I am; I think that sounds fascinating.

But back to Fred and his extended series, “Interesting Angles on the DOL’s Fiduciary Rule.” These are excellent legal opinions on a matter that either already is or is going to be of critical importance to you and your firm … and it’s FREE.

Have you been coasting along assuming that because you’re already a fiduciary and you’re already serving your retirement plan clients’ highest financial interests, you won’t need to lift a finger when the DOL’s rules go into effect next spring? Fred will set you straight. I’ve found each “Interesting Angle” to be short, well-written and at least partially applicable to “our world,” often in important ways.

I’m not saying there’s cause to panic. As a fee-only, evidence-based RIA firm, you are much (much!) better positioned than your suitable peers.  The headlines I’m seeing about brokerages, big banks and insurance agencies are piling up fast, as they bemoan their impending regulatory burdens, wring their soon-to-be tied hands, and contemplate grim choices ranging from entire overhauls to full-scale surrender. I suppose the government may still step in and “rescue” them from their fiduciary fate, but let’s hope for investors’ sake that’s not the case.

Unlike the suitably modeled financial folks, you shouldn’t have to change or die. But you should be paying attention. There’s red tape afoot in the fine print, and Reish has been calling it out for us. Here’s one from his most recent Angle #23:

“Another example of an RIA prohibited transaction is where the adviser recommends an allocation to fixed income and an allocation to equities, but then charges a higher fee for managing the equities. By virtue of recommending the allocations, the adviser has determined the level of its compensation . . . and, therefore, has committed a prohibited transaction.”

You may not have thought of that one, huh? While most RIA firms I work with aren’t pricing in this manner, it could be a “gotcha” if you are. And there are plenty more where that one came from.

So, go ahead and catch up on the backlog of Reish’s Interesting Angles on his blog. Here’s the first one, if you want to begin at the beginning. Subscribe to receive his future releases too. They’re worth every penny.