{"id":79213,"date":"2023-11-01T03:39:18","date_gmt":"2023-11-01T07:39:18","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/biden-wants-to-make-this-big-change-to-ira-rollovers\/"},"modified":"2023-11-01T03:39:22","modified_gmt":"2023-11-01T07:39:22","slug":"biden-wants-to-make-this-big-change-to-ira-rollovers","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=79213","title":{"rendered":"Biden Wants to Make This Big Change to IRA Rollovers"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000786965\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<p>        <!-- eventually when we know what this card will be we can change it and leave this one --><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:71.36150234741784%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\"><\/div>\n<\/figure><\/div>\n<p>The Biden administration on Tuesday proposed a rule aimed at protecting retirement savers from conflicts of interest during account rollovers.<\/p>\n<p>President President Biden spoke Tuesday afternoon on what the White House has called a crackdown on \u201cjunk fees\u201d in retirement planning. Such fees chip away at account balances over time, leading to lifetime savings that are up to 20% less than if advisors were held to the highest standards, according to a White House statement.\u00a0<\/p>\n<div class=\"paywall\">\n<p>Under current regulations, advisors who provide advice to workers rolling their 401(k) or related plan into an individual retirement account are generally not considered a fiduciary\u2014that is, a professional who must put clients\u2019 interests ahead of their own. This means that an advisor could steer an investor into, say, an annuity that pays the advisor a big commission, even if it\u2019s not the best option for the investor. In some cases, commission costs and other fees are baked into the product, as opposed to paid outright, and investors don\u2019t realize that they are silently eating into returns over time.\u00a0<\/p>\n<p>\u201cThis is about basic economic fairness,\u201d Biden said in remarks at the White House. \u201cPeople are tired of being played for suckers.\u201d<\/p>\n<p>Workers who spend their entire careers squirreling away hard-earned money for retirement should be able to trust that their advisor puts clients\u2019 best interest ahead of their own enrichment, he said. <\/p>\n<p>While Tuesday\u2019s announcement builds on the Biden\u2019s administration\u2019s effort to crack down on junk fees across banking and other areas of consumer life, the U.S. Department of Labor\u2019s push to strengthen investor protections stretches back more than a decade. These efforts have aimed to expand the definition of who is considered an investment advice fiduciary under the Employee Retirement Income Security Act of 1974 (Erisa).<\/p>\n<p>Currently, one-time advice is generally not treated as fiduciary advice. And yet, rollover advice is often provided on a one-time basis, and it can be some of the most important guidance retirement investors receive, the White House said. Millions of savers roll over 401(k) plans into IRAs each year; in 2022, Americans rolled over approximately $779 billion from 401(k)-like plans into IRAs, according to the White House. The proposal would also make insurance products like annuities subject to the Securities and Exchange Commission\u2019s Regulation Best Interest, which currently governs the sale of mutual funds but generally does not cover commodities or insurance products.<\/p>\n<p>The proposal will now go through various steps en route to being finalized, including a public comment period.\u00a0It may meet with legal challenges, as have prior efforts to expand the definition of fiduciary.<\/p>\n<p>Critics charge that the proposal could hinder the ability of lower and middle-income savers to access advice by reducing the number of advisors willing to work with those investors. (Fiduciaries typically charge a flat fee or percentage of invested assets.) <\/p>\n<p>In a statement, the Insured Retirement Institute, a trade organization that represents life insurers, asset managers, and broker-dealers, among others, said, \u201cthe rule will only increase retirement insecurity and result in millions of lower- and middle-income workers and retirement savers losing access to needed financial advice.\u201d<\/p>\n<p>Write to Elizabeth O\u2019Brien at elizabeth.obrien@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/biden-retirement-junk-fees-ira-rollovers-fiduciary-1b87f859?mod=investing\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Biden administration on Tuesday proposed a rule aimed at protecting retirement savers from conflicts of interest during account rollovers. President President Biden spoke Tuesday afternoon on what the White House has called a crackdown on \u201cjunk fees\u201d in retirement planning. Such fees chip away at account balances over time, leading to lifetime savings that [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":79214,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-79213","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Biden Wants to Make This Big Change to IRA Rollovers | iFintechWorld<\/title>\n<meta name=\"description\" content=\"The Biden administration on Tuesday proposed a rule aimed at protecting retirement savers from conflicts of interest during account rollovers. 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