DOL Limiting choices in IRAs

Discussion in 'General Discussion' started by m&m, Sep 3, 2015.

  1. m&m

    m&m Member

    Got an email from TOS regarding DOL decision that might impact TOS services to us, "remove most research, tools and educational resource so my account would not be considered and "advised IRA"" does that mean no more analyze tab and more business to OV? :mad:
  2. Meteor528

    Meteor528 Member

    I received this email today, as well:

    The U.S. Department of Labor ("DOL") has proposed a rule that it believes will reduce conflicts of interest between financial professionals/firms and retail investors seeking advice in their Individual Retirement Accounts ("IRAs"). The rule would establish a strict "best interest" standard for advice relating to IRAs that, among other things, would prohibit the use of options in broker-advised retirement accounts.

    The DOL rule includes numerous detailed, complex conditions that would negatively impact retail investors like you, including limiting your investment choices.

    TD Ameritrade, along with many other brokerage firms, has conveyed serious concerns about the rule and its conditions to the DOL. You can view our recent comment letter here.

    We believe that, as a valued client who has elected to trade options in your retirement account, you should be made aware of these potentially drastic changes and be given the opportunity to voice your own concerns with Washington before the rule becomes final.

    Voice your concerns
    The DOL proposed a rule to establish a strict "best interest" standard for advice relating to IRAs. Among other changes, the rule would prohibit the use of options in broker-advised retirement accounts. If you are concerned about these changes and your ability to continue trading options in your IRA, you have an opportunity to share your concerns with your Congressional representatives.

    Why should I be concerned?
    As a result of this rule, many tools, research, and information services that were previously viewed as guidance or education will likely be deemed "advice" and subject to the fiduciary "best interest" standard. This means, without changes to the rule as it currently stands, your account, if considered a broker-advised IRA, would no longer be eligible for options trading. In order for you to continue to trade options in your IRA, we would likely need to remove most research, tools, and educational resources so your account would not be considered a broker-advised IRA. Or, we could convert your account to a fee-based investment advisory account in which options could be used. The first approach may limit your ability to make informed trading decisions and the second would likely increase your costs.

    These IRA options issues arise because, for the first time in history, the DOL is proposing a limited list of "permitted assets" in broker-advised IRAs. Options are not on this list. So even if a brokerage firm were willing to restructure its business to fit within the strict conditions of this rule, it could not allow the use of options in broker‑advised accounts.
    What can I do?
    If you are concerned about these changes and your ability to continue trading options in your IRA, you have an opportunity to make your voice heard.

    We are making a tool available that can help you contact your Congressional representatives and tell them about your concerns. This tool includes contact information based on ZIP code, as well as letter templates that you can use or edit to suit your needs.

    The DOL comment period for this rule will only be open for a short time. If this issue is important to you, we encourage you to speak out today.


    Steven Quirk
    Senior Vice President, Trader Group
    TD Ameritrade
  3. Challenger

    Challenger Member

    The Department of Labor is planning this in Broker Managed Accounts only. TD Ameritrade has clients with this type of account. Most of us don't. So it is something you may want to double check with your broker.

    My understanding is this new regulation would apply when a Broker is making decisions on behalf of their Clients to make sure these decisions are in the Client's best interest.
  4. Mike Schwartz

    Mike Schwartz Member

  5. Tps

    Tps Guest

    what hogwash
  6. Andrei

    Andrei Well-Known Member

    Never underestimate damage the Government's "good intentions" can cause.
  7. m&m

    m&m Member

    this is the response I got from my senator,

    "As you may know, on April 20, 2015 the Labor Department acted on President Obama's direction to issue regulations requiring retirement advisers to abide by a "fiduciary" standard and put their clients' best interest before their own. While well-intended, this rule could actually harm those it aims to help by limiting access to financial advice and raising the cost of saving for retirement.

    Given the complexity and wide-ranging nature of this proposed rule change, I joined 35 of my colleagues on May 12, 2015 in sending a letter to Labor Secretary Thomas Perez asking the department to extend the proposed rule's comment period from 75 to 120 days to allow for sufficient review time. In his response to our letter, Secretary Perez informed us that, after the 75-day comment period, a public hearing will be held. After the hearing, the comment period will temporarily reopen – providing "between 111 and 127 days" of discussion time. I will certainly keep your comments in mind as I continue to monitor the Department of Labor's decision."
    RayM likes this.

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