That headline – for those not old enough to remember – is a take-off of a public service announcement, widely broadcast before late-night news programs in the 1970s, asking viewers if they knew where their children were.
Since, at least metaphorically, we’re in the final hours before the Department of Labor’s new rules go into effect governing retirement accounts, asking you to review where and how you hold your dividend investments is a similar kind of reminder.
The Coming Fiduciary Standard
Next April, the DOL will require that financial advisors who provide advice in connection with a qualified retirement account – an IRA, Roth IRA, 401(k), 403(b) or similar plan, or a rollover from such plans – be held to a fiduciary standard. Broadly, that means advisors must put clients’ interests first.
Practically, it means that if advisors recommend an investment that pays them a high commission over an investment that is virtually identical but costs the investor less, the advisor and his/her firm could be sued for violating the rule.