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How does the DOL Rule Affect Me? Do I have to document best interest when doing rollovers? Effective June 9, 2017, financial advisors who provide investment advice to retirement plan participants have to adhere to the Impartial Conduct Standard. The standard essentially stipulates the following: Best interest standard of care, which essentially combines ERISA’s prudent man rule and duty of loyalty Advisor cannot receive more than a reasonable compensation Advisor cannot make materially misleading statements After June 9th everyone dealing with rollovers is effectively an ERISA fiduciary. As we have written numerous times, under ERISA there is private right of action. Therefore, even if the DOL does not enforce the...

Daniel Satchkov

23 May 2017

What June 9th DOL Rule Date Means For You: How to Not Be a Low Hanging Fruit for Litigation Attorneys

What June 9th DOL Rule Date Means For You: How to Not Be a Low Hanging Fruit for Litigation Attorneys On May 22, Secretary of Labor Acosta confirmed something that we argued since the DOL Fiduciary Rule got delayed in March. Specifically, he said that June 9th is the date when ANYONE advising on retirement assets effectively becomes an ERISA fiduciary, subject to one of the strictest legal standards ever devised. No more delays. If you perform any following transactions you will effectively be an ERISA fiduciary on June 9th: Recommendations of investments, investment strategies, insurance and annuities, investment managers, other fiduciaries, distributions and rollovers, and IRA transfers; Recommendations to...

Daniel Satchkov

11 Apr 2017

RiXtrema’s Record Study of Retirement Plan Investment Expense Finds Over $17 Billion of Annual Waste

RiXtrema’s Record Study of Retirement Plan Investment Expense Finds Over $17 Billion of Annual Waste Fiduciary best practices research took 17 days of non-stop calculation on powerful 32 CPU Core computers NEW YORK– April 11, 2017 – RiXtrema announced the findings of a big data quantitative research effort on defined contribution plans. The largest ever conducted, the study involved 52,529 plans, and included detailed plan menu choices in the calculations. RiXtrema’s award winning research team used quantitative algorithms to estimate the potential savings to the defined contribution plans by switching to more efficient menus. The analysis went beyond fees, also focusing on quality measures to ensure that fee savings would...

Daniel Satchkov

06 Apr 2017

Breaking News on Rollovers: What DOL Really Did on April 5

We want to bring something very important to your attention regarding DOL Fiduciary Rule delay that was announced yesterday. The rule is delayed until June 9th and further examination of various provisions will happen throughout 2017. So, what will really happen on June 9th? Something very important. Any rollover advice will now have to be provided under the new fiduciary standard and Impartial Conducts Standard. I spoke today with Micah Hauptman, a fiduciary expert and a financial counsel at Consumer Federation of America. I asked him to explain how this ruling affects IRA rollovers. Here is what he said : “It’s important to note that, because rollover recommendations are now explicitly...

Daniel Satchkov

03 Mar 2017

New Portfolio Crash Test Scenario: Trump Tax Cuts

One of the recurring themes through the presidential elections and the speech yesterday were the tax cuts that are coming to businesses and middle class individuals. We in RiXtrema decided to examine what are the possible impact on the US economy. In our opinion the tax cuts should boost growth and positively stock market while be bearish on bonds because of the stimulus those cuts might bring. The major drivers of asset prices in the US economy are the stock market which is represented by S&P and government bonds that represent a large chunk of fixed income portion of the economy and dictate the pricing of mortgages and IG corporate...