New proposed regs for expats with US retirement accounts

[origami]

I got the following message today from my investment bank. I've already had to get a new financial advisor that is licensed to work with "korean" clients. Now it appears the govt wants to decide what we're allowed to invest in, WRT our retirement accounts. Has anyone heard about this?

What you need to know today
The Fiduciary and Conflicts Interest Rule has been proposed by the United States Department of Labor (DOL), the regulatory agency which oversees retirement plans. This is an industry-wide regulation that will apply to all clients, firms and financial advisors.

• The industry-wide rule is intended by the DOL to eliminate the potential for any conflict of interest between a client and a financial advisor or firm with respect to retirement accounts and assets.

• Once the rule is implemented, the DOL will have a say in the investments that are available to you and the way we can advise you on your retirement accounts.

• The rule will apply only to your retirement accounts, not to any other accounts or assets you hold at [bank name] or any other firm.

• It is currently only a proposal, but we expect that a final rule will be published in late March or early April, and that it may be effective by the end of 2016.

[rupertpenny]

Ugh WTF. We didn't really have any retirement accounts set up before we moved because we were young(ish) and poor(ish). We FINALLY found someone who would deal with us as US Citizens living abroad and I don't want it to get fucked up. I never predicted how difficult being an American would make this kind of thing. Every day I understand more and more why people expatriate.

[origami]

I naively thought we wouldn't have many issues since we're temporary expats, my DH works for a US company, gets paid in $US and had all our accounts set up before we left. Pffffffffft.

[Cicero]

I'm sorry, but WTF?!

[Cicero]

From my preliminary digging it does seem as if this would apply to everyone, not just Americans abroad. Investors are mad, investment firms are mad, Congress is mad. It appears that the chances of being quashed by the House and Senate are high--since all you need to kill an executive regulation is a joint resolution.

[origami]

Oh good! I thought because it said the DOL regulates overseas retirement accounts that meant we were unfairly targeted again. I'm actually glad it would apply to everyone because if it were just us it would probably pass. Since we're all giving ISIS our monies and cheating the tax man with the profits.

[Cicero]

Mar 18, 2016 0:42:17 GMT -5 origami said:

Oh good! I thought because it said the DOL regulates overseas retirement accounts that meant we were unfairly targeted again. I'm actually glad it would apply to everyone because if it were just us it would probably pass. Since we're all giving ISIS our monies and cheating the tax man with the profits.

I read it like that too, which is why I am trying to dig and see if there isn't some piece of it aimed at expats.

On its surface it seems as though the DOL has decided that people are buying funds with what they deem to be too high of fees in their retirement accounts so they are trying to make that impossible. Never mind that the low fee ETFs they are trying to force people into have their own issues (and are subject to commission in addition to the management fee so depending on how often you're reallocating they can be more expensive than than the higher fee mutual funds).

[Cicero]

And seriously, LOL that the creator of a giant ponzi scheme as the answer to retirement savings knows better than I do how I want to allocate my retirement portfolio.

[mrsukyankee]

My retirement accounts have basically told me I'm not allowed to use certain types of funds they offer due to being overseas.

[trident0]

The purpose of the law is to require financial advisors to act in their client's best interest. The fact that they phrased it the way they did seems to be a scare tactic. It applies to everyone, not just expats. Little more info copy/pasted below. I think this is a good move, if your politics skew more tea party I can see how this conflicts.  It is intended to prevent financial advisors from recommending a product with a higher commission or fees for the advisor over one with better returns for you.

"Financial advisers will be required to recommend investments that are in their clients' best interests — and not just the ones that yield the biggest commissions —under a long-awaited regulation being rolled out by the Obama administration Wednesday.

The Labor Department estimates that its so-called "fiduciary rule" could save American investors more than $17 billion as financial advisers can no longer steer customers toward products with higher fees and lower returns. Under current law, financial advisers are required only to recommend suitable investments.

"Many companies advertise that they put their clients interests ahead of their own," said Labor Secretary Tom Perez. "Today's rule ensures that putting customers first is no longer a marketing slogan. It's the law." "