DOL Rule for RIAs

Scenario: A client says my firm downsized and I want to roll the asset over to an IRA and have us manage the assets. We explain the due diligence we must do for the new DOL rules. The client says I don’t care the difference in expenses or assets I just want it rolled over and you manage it.

**Question: ** Will the firm meet the DOL requirements if we prepare a document for the client’s signature that says exactly what the client’s wishes are? It seems that if we’re putting the interests of the client first, then their wishes should come first. We can discuss their options without going into details of expenses and investments. However, if they want everything consolidated with us, aren’t we meeting their needs first?

Sidenote: We are strictly an RIA that does not sell product

Thank you in advance for your response.

Comments

  • Love to hear other's thoughts on this question.

    I am considering a form for client's signature comparing the existing and proposed plans with a statement on the recommendation, of why it is in the best interest of the client (so in the above scenario (I wish to consolidate my assets and understand that this option will cost more in fees).

    An add on question -- is the form a client only signature or is there any reason the IAR should also sign? The CCO?

  • The resolution we came to is (1) short form - one paragraph page stating the client understands the fees, risks, investment variations, etc but wants our firm to manage their retirement assets and assuming the risk in doing so. then we have option (2) long form - which we would list the fees, investment options, why it's in the clients best interest. So far, all clients have went with our "short form." Primarily because we already manage their money. We only have the client sign the form. We felt there was no reason why internal staff needed to sign the form, an FYI though is that our accounts are managed on a discretionary basis. Thanks.

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