The Washington Post

Color of Money Live: What the new fiduciary rule means for your retirement

Jun 15, 2017

Join Washington Post nationally syndicated personal finance columnist Michelle Singletary for an online discussion.

“Knowledge isn’t power. The right knowledge is power.”

Stay informed.

Sign up for Michelle Singletary’s free newsletters: "Your Retirement" on Mondays & "Personal Finance" on Thursdays http://wapo.st/personalfinance

Read & share Michelle Singletary’s Color of Money Column on Wednesdays and Sundays: http://wapo.st/michelle-singletary

Follow Michelle Singletary on Twitter (@SingletaryM) and Facebook www.facebook.com/MichelleSingletary

Read Michelle's recent columns.

So I see a lot of you jumped on the chat early.

Retirement and the new Department of Labor fiduciary rule is a hot topic. And it should be. Already people are getting bad advice or being told they can't do something because or the rule. So much of it is wrong. 

And here to help me clear it up is Barbara Roper, director of investor protection  from Consumers Federation of America. 

So let's get started. 

Michelle, I've been reading your advice for a few years and have recently been able to have great talks with my college senior and college graduate daughters about how to handle their finances. My oldest graduated last spring and as soon as she started her engineering job, she began to contribute regularly to charity, a life happens fund and a long-terms savings fund. This spring, she was unexpectedly hospitalized due to a serious illness and was able to pay the out of pocket expenses from her life-happens fund. Thank you for all you do to help people handle their money wisely.

Just thought I start the chat with a few testimonies. 

First, I hope your daughter is well now. 

I'm always so happy to see when parents talk and kids listen. What a tremendous thing you have done for your girls. Good for you and great for them!

I'm the poster from last week who needed the final push to pay off my 92k in student loans with life insurance proceeds. I'm very happy and excited to report that I paid them off!! I finally feel like I can fully realize my savings' goals and take on what life throws at me. It feels so good to be free of the debt and on my way to financial happiness. Thanks for the extra encouragement and advice!

Congrats on your financial freedom. So glad you came back to give us the good news!!!!

So proud and happy of you and for you.

 

(  )

That's my hug.

Hi Michelle, I read your article today in the Dallas Morning News. One point I have concerns about is the comment made by Barbara Roper where she says advisers need to consider a client's overall picture including "how the rest of the couple's portfolio is invested." Using your example of the couple having different accounts invested differently (one all stocks, one all bonds for instance), I, as an advisor, have no control over accounts that I do not manage. If I considered the other accounts to make my recommendation, and the client makes a change to the other accounts without telling me, then my advice is now not in the best interest of the client (I realize I am only held responsible for what I know at the time, but the client is hurt if they, or their other adviser, makes changes to the rest of their portfolio. This is why we should only consider the investments the client has with us, and their need for these funds and risk tolerance. Now, if I am engaged in financial planning with the client, and I am managing their big picture with visibility to all their financial assets, then yes, I do have some control over the big picture. But this is not the issue mentioned in the article. Additionally, If I am to consider the entire financial picture of the client, then I am giving the client the perception that I am their financial planner, and am engaged is financial planning with them. As a CFP, this creates numerous issues for me. 

In the previous example, the financial professional was advising both accounts, so this issue did not arise. As I understand it, your concern relates to what you don't know about the client's accounts. As long as you have satisfied your obligations under the "know your customer" rules, considered the client's overall financial situation, and taken that information into account in developing your recommendations, you can't be blamed if the customer fails to inform you about a change in their situation. The DOL rule makes clear that the best interest standard isn't a "gotcha" standard, and you won't be found in violation where you have a reasonable basis for believing what you are doing is in the customer's best interests.

 

Read Michelle's column: The government’s new retirement rule may not stop your adviser from giving you bad advice

You say the rule does not limit. What I want to do, but my advisor says I am not allowed to make random deposits. Must be monthly. Definitely not what I want. I have to leave 2 IRAS alone and open 3rd for lump sum...confusing and dumb. I will "grandfather" but it is not the solution. Thoughts? Ty.

If your advisor is limiting your ability to make random deposits, that is a choice they are making, not a requirement of the rule. If it is a minor annoyance and you are otherwise happy with the services you are getting, you can put up with it. Otherwise, you can shop around for a firm that doesn't impose these sorts of arbitrary restrictions.

Can I be honest. I'm getting a lot of email from folks who say their advisor is telling them they can't do one thing or the other because of the new rule. 

It's hogwash!!

They either don't want your account, in which case fine, kick them to the curb because there are plenty of firms who do; are being overly cautious, which is understandable because it's a new rule; don't understand the rule, or trying to force you into a "managed" account, which will make them more money. 

 

I was told by my Morgan Stanley financial advisor that the companies like "banks" (i.e. Edward Jones) had changed all of their IRA accounts to being charged a yearly percentage of a persons balance (1%). She said Morgan Stanley was not going to make any changes in 2017 but will probably do that starting 2018. I am currently on a charge basis per investment/transaction because I do not trade very frequently. I told her if that was the case, I would probably be changing companies. She said "good luck in finding one that won't be making this change"! If this is in fact true, it looks like this new fiduciary ruling has backfired on the everyday IRA account holders like myself!!!

There are many firms that have publicly announced that they will continue to offer commission accounts under the rule. There are also fee accounts where the costs are so low that even investors who trade infrequently can see lower costs than they pay in commission accounts. So, if your firm isn't willing to serve you on the terms you prefer, find one that will.

Where is the chat?

Hey -- Producer here. If you're on this page, you're in the right place. The chat is text-based. No audio or video and answers will roll in as Michelle answers them.

I am thinking about leaving my job and rolling over the money in my workplace 401(k) account into an IRA. If I ask a professional investment adviser for advice about how to invest the funds now that they are in the IRA, does the new rule provide me with new protections?

The new rule requires both that any recommendation to rollover the money has to be in your best interests, and that any advice about how to invest the money in the IRA also meets that standard. In addition, the fees have to be reasonable, the firm has to eliminate harmful conflicts, and the adviser can't make misleading statements. We believe that will greatly improve the quality advice that you and others in your situation receive.

Michelle here. If I were you I would make sure I compare costs before moving funds out of your workplace plan. 

To you have to move the funds?

Have you checked to see what the fees are because they could be low and reasonable already.

If you like the investment options in your plan, and fees are low or reasonable, why move? 

When I retire, I'm not leaving my plan. Why? The fees are super low compared to what I would get with any adviser or firm. And the options are great (Vanguard). So I have no plans to move. 

My husband's retirement money is in TSP. Again, not moving as of now. Super, super low fees and again good investment options. Sure there are some restrictions but none that make it worth paying more for a person for firm to manage what we've already been managing just fine with the options he's had. 

I received a huge (to me, anyway) PFO check this week from my employer (equivalent to just over 2 of my usual paychecks) and I know I'm making progress with my mindset when my first thought was "What debt can we pay off with this extra money??" If you're curious, I made an extra car payment and paid off completely the last two outstanding medical bills that we have, freeing up our budget to pay off more credit card debt in the coming months. So excited that my mindset is where it is now. Thanks for the inspiration, Michelle! I really enjoy your chat and columns.

Love it!

Now can I tweak you for future payoffs?

I like what I call the debt dash. Create a spreadsheet with all your debts starting with the one with the lowest balance. Pay off the lower ones first. As you pay off one debt take the payment you were making on that debt along with any extra money you have and apply it to the next debt on the list. 

You make faster progress clearing the list and as a result speed up the payoffs so that higher interest debt stills gets paid off early. 

I just had to sit down at my desk. Good for you!!!!

I really love to join in people's debt payoff victory. It's inspiring. 

Because this person could have gone out and party hard -- stuff, vacation, car, etc. 

But he or she chose freedom. And that freedom will still allow for those things but now not with debt or at the expense of getting rid of debt.

I see debt as a monkey on your back.

Get the monkey off. 

Feel free. 

 

How will the rule be enforced?

This is a simple question, with a surprisingly complex answer. For advice to retirement plans (such as 401(k) plans) and advice about rollovers, the Department of Labor has direct enforcement authority. For now, they've said they won't bring enforcement actions where they see a good faith effort to comply. The idea is to guide firms into compliance instead of hitting them with a penalty when they are doing their best to come into compliance. There is also a private enforcement mechanism for this sort of advice, which will help to create a strong incentive for firms to comply. Unfortunately, the enforcement mechanism for advice to individual IRA investors isn't due to come into effect until January 2018, and could well be further delayed. These investors will have to continue to be on their guard against advice that is not in their best interests.

I am a 63 year old widow who set my trust up 5 years ago to go to my 2 children. I recently switched my sizable IRA to a fiduciary investment firm. Although they can't give me legal advice, I came away feeling that having to pay a percentage of my estate at the time of death is much greater than if I just had a simple will.

Even if your firm can't provide legal advice, they may be able to recommend a good attorney who can. If you haven't already done so, try asking them for a referral.

Why wouldn't the new administration be happy with the new rule? Every American stands to gain by enforcement of the rule. As a non-fiduciary, I guess I am having a hard time understanding...

This rule is completely consistent with the populist message of this Administration. Unfortunately, the powerful financial firms that profit under the old system have spread a lot of misinformation about the rule. Now that it has begun to be implemented, we are optimistic that real world experience will show the enormous benefits that working Americans and retirees receive as a result of the rule. 

Why?

Because the big firms have more lobbying dollars than we regular folk.

This is why as individuals you have to know about this rule. You need to follow news about the rule. You need to push back on firms corrupting the implantation of the rule. 

Question them if they tell you something that just doesn't seem right. 

Move your money if you aren't getting the advice and service you want or need. 

I have both an adviser and I invest on my own. The investment adviser gives me guidance but I also do a lot of research on my own. And guess what? My portfolio that I invest on my own is doing just as well as anything I've had managed. I'm in low-cost index funds.  

Please use this version. The previous post was not complete. I hope that you can assist with a hard decision that I’ve been grappling with. I want to purchase one of the new-build townhouses popping up in Upper Marlboro. They are in the upper $300s – low $400s. I’m trying to see which is better – purchase the new townhome or renovate my current home. I currently live in Temple Hills (my first home purchase). I owe about $240K on my mortgage (at 5%, no PMI) and have about $70K in equity/appraisal value about $310-$320K. If I go the renovation route – it would cost about $90-$100K. This would use all of my home equity plus about $20K in savings. If I purchase new, I’d try to put down $80K (20%) to avoid PMI, but if I don’t get my full asking price, it would be a 15% down payment. I have minimal credit card debt, no car note and no student loans. Salary is $135K. My credit score is “Good” so I anticipate a favorable mortgage rate. What do you think? My first choice is to purchase the shiny new home that gives me all the bells and whistles. However, these things are weighing on me: - I purchased my home in 2004 and saw housing values plummet when the market went south. Unfortunately, homes in Southern and Central PG counties haven’t kept up with the rising values in other Maryland counties, DC and Virginia. I’m worried about the rate of appreciation and possible depreciation. - Am I looking at this correctly? If I purchase the new home at $400K the mortgage amount would be about $340K if I put down a 15% down payment. If I renovate, the mortgage amount would be about $310K + $20K savings. Is it better to have the new home with some equity or keep my current home with no equity? Is that even an issue? I’m sorry if this seems unfocused. It’s been bouncing around in my head for a while so I tried to get it all out. Any insight that you can provide would be greatly appreciated. Danette

Wow. So much to unravel. And please, please understand I'm not a financial planner so this is just my personal opinion. 

First before moving or doing anything pay off the credit card debt. All of it. But looks like you can do that easily.

Make sure the downpayment is in addition to having your emergency fund and life happens fund. This money should not be your downpayment money. It's your if life happens or I lose my job money. 

Now, if you have/are

-- No consumer debt

-- Emergency fund of at least three months

-- Life happens fund to pay for the things in life happen like car repair

- Saving for retirement and on track

-- New townhouse monthly housing expense (mortgage, taxes, insurance, HOA) isn't more than 36% of your net pay (minus taxes).

If you can check those things off I would buy the shiny new house because it will have all that you want and in an area you want to move to.

But really after the check list it would come down to where do I want to live. Not remodeling, home prices, etc.

Where do I want to live?

Move because that's where you want to live.

I've read that a number of brokerages, to comply with the Department of Labor's fiduciary rule, are shifting smaller nest eggs from commission-based accounts into fee-based, “advisory” accounts. What should I be worried about and what questions should I be asking my financial advisor in this case?

While some brokers are shifting retirement accounts to fee accounts, many continue to offer commission accounts. Where both options are available, the rule requires the broker to recommend the option that is best for the customer. The first question you should ask is what fee you will be charged and how that compares to your average commission costs for the past several years. If the cost of the advice is going up, are you getting valuable new services that you want and need? Or will you pay lower costs on the investment recommendations to make up the difference? If not, you should ask on what basis the advisor determined that this was your best option. If you don't like the answers you get, shop around for a different firm that offers the services you want and need and allows you to pay for them in the way you prefer. There are lots of options out there, and you may find you get better advice at a lower cost if you are willing to shop around.

What part of my investment portfolio does the fiduciary rule apply to?

The rule applies to advice regarding Individual Retirement Accounts (both Roth and traditional), including rollover recommendations. It also applies to workplace retirement plans, such as 401(k)s and SEP and SIMPLE IRAs. Some 403(b) plans are also covered, but others, such as K-12 403(b)s, unfortunately are not. It does not apply to non-retirement accounts.

Please explain the Fudiciary Rule and its pros and cons of the new rule. My thought is advisor still may not act totally on your favor. For the most part they are self policed, correct?

The rule requires all financial professionals who give investment advice to retirement savers to act in their customers' best interests, charge reasonable fees, and refrain from making misleading statements. It also requires firms to eliminate incentives that encourage and reward advice that is not in customers' best interests. That's a big deal, and it is already changing the products recommended and the way advisers are paid. But the rule has not been fully implemented, and IRA investors in particular won't get the full benefits of the rule until that occurs. And, of course, it only applies to retirement accounts. So, if you are getting advice from a broker-dealer or insurance agent, the rest of your accounts will still be governed by the weaker "suitability" standard. 

Hi Michelle, We just received word that our mortgage was approved and are preparing to close on our first house! We so excited and overjoyed - especially since the monthly mortgage payment is not much more than we were paying in rent. We're researching how much to pay extra towards the principle each month, but there are so many resources out there it's hard to know where to start. Do you have a mortgage prepayment calculator you recommend?

Congrats on the new home.

So before you make extra principal payments, look at your debt situation. If you have any credit card, student loans, car loans, retirement loans, etc. I would tackle them first.

If you are clear on those fronts, you can find an good early "mortgage payoff calculator" at bankrate.com 

Just making one extra mortgage payment a year can knock off several years. My husband and I have been making extra payments and although we now have a 15-year mortgage we probably will be done in like 8 to 10 years because of our extra principal payments. 

Also when you send in the extra money make sure to note it's to be put on the principal. And check that it is.

I let my 25 year put an unexpected car repair charge on my credit card so his car would pass inspection (so he can drive to work). I thought we had an understanding that he would pay me back the $400 with his next pay check so I would be able to pay off my credit card bill completely. He only came up with half of it, stating that it wouldn't matter that I didn't pay off all of the bill this month. Not withstanding that it is my personal policy to always pay off the credit card each month as a way of controlling debt, is there something I can point him towards to read which explains why it's such a bad idea to let your credit card bill build up? Or is it only me? He thinks I'm a fuddy duddy and I think he needs to learn more financial responsibility, that this is a poor habit to establish. I do have an emergency stash of money but this didn't qualify as my emergency in my mind, I'm charging him the interest fee I will be incurring.

I plan to put your question in my upcoming column because I want more to learn from your experience.

I completely understand why you let your son charge on your card. And now he has to live with breaking his word (because I'm assuming he had the money later as promised). 

A couple of things stood out for me in your note

-- "I thought we had an understand." You did or you didn't. If you really didn't like in writing, you son may have an out. When doing such things be very, very clear. Send an email or text, which seems to be the preferred communication for young adults. Make sure you get an acknowledgement of said agreement.

-- Your personal policy. This should have been made clear if it wasn't. 

-- Your son isn't buying into your financial way of life. If he doesn't and has shown or continues to show a disregard for it then do not let him use your card ever again. I know. How will get to work? Let him figure that out. And maybe he should have done that in the first place. People can be resourceful when forced. Get a ride to work with a co-worker, take public transportation, etc. 

-- I agree that the has to pay the extra interest fee. And make that clear now before you hand him the bill. 

 

My Congressman is supporting a law that he says will require advisers to act in my best interest but is much more protective of consumers than the DOL regulation. Is that true?

No! The bills that have been introduced all roll back the protections provided by the DOL rule. They make it easier for advisors to avoid having to act as fiduciaries, and they apply a much weaker disclosure-based standard. That's essentially a return to the past. It will not provide the best interest advice retirement savers need and deserve. 

Why is this rule controversial? Who could be against it?

The old system worked really, really well for the broker-dealers, insurance companies, and mutual fund companies that raked in tens of billions in profits operating under a standard that let them put their own financial interests over the interests of retirement savers. They aren't going to walk away from that gravy train without putting up a fight.

What do you think the impact will be now that the SEC has expressed interest in exploring a rule on fiduciary duty?

The best outcome would be for the SEC to adopt a rule modeled on the DOL rule, so that the standard would be consistent across both retirement and non-retirement accounts. Our concern is that the SEC could instead adopt a watered down rule, and that industry groups would then use that to water down the DOL rule. We need strong rules from other agencies for investors to be fully protected, but a weak SEC rule could end up doing more harm than good.

Good Afternoon, My spouse and I are DINKS in the DC area that have debt (we kow now and hindsight is 20/20). Spouses parents (who are divorced) recently retired in the last 2 years and mine have not yet. I am concerned because 1. their health 2. mom still has at least 10 years on her mortgage and extensive medical and credit card debt and it is my concern that she is depending on her only child to help her financially (by moving in with us at some point). Michelle, we honor our fathers and mothers but the idea of having to support their poor choices financially is frightening. We will pick up extra assignments or gigs to help pay down debt. How can I prepare us for the thought of having to take care of a mother who is financially unstable when we don't have a large savings/emergency fund and have debt ourselve? I feel horrible but I don't want a living in patient bleeding us dry.

I get this type of question quite often. I really do understand your situation. My mother, who did not raise me, was a poor money manager and a year before she died asked me to make her mortgage payment. I didn't do it because I wasn't sure it would help and that she might lose her home anyway.

Although she had abandoned me as a child, I still felt some guilt. But in the end I had to do what was in the best interest of my family, my finances. 

And she figured it out. 

I would strongly encourage you to had a financial meeting with your parents. Tell them what you told me. You don't have to say, " I don't want you to live with me," but express your concerns about their financial health and your ability or inability to help given your situation. 

If they won't meet or talk be clear of what you can do or are willing to do. 

AARP has a lot of resources on its site for caregivers or potential caregivers. 

Most importantly, as I've said, bring all this out in the open and talk it through. You may still end up helping but at least you can say what you can and can't do.

My financial advisor said the percentage fee on my retirement account will drop now because the new fiduciary rule allows "more pricing flexibility that I didn't have before." Do you know what this refers to? Thank you.

Since the rule was finalized, some firms have lowered their fees to make them more competitive and to satisfy the requirement that fees be reasonable. Other firms have been willing to negotiate lower fees in order to show that a fee account really is the best option for the customer. Perhaps you are benefiting from one of these situations, but it is hard to say for sure. Just enjoy that, as your costs go down, your long term savings should go up. 

I had invested with Merrill Lynch for many years. At the beginning of December 2016, my advisor told me he would no longer be servicing my account because of the new rules and also because I didn't have a minimum of $250,000.00. My account was transferred to Merrill Edge. From what I understand, I can continue to "keep" my money where it has been invested but with me doing all the buying/selling or change over to the Edge account, which is akin to index funds. In hindsight I wish I had educated myself in how to invest but I, like so many others, trusted my advisor. So my question is, what now? I'm 61 and feel like I'm scrambling to figure out the best way forward. Thanks very much for your consideration.

I'm sorry that you are having to make what can be an intimidating decision about how best to manage your retirement accounts. The good news is that there are many firms available that are willing to provide fiduciary advice, at a reasonable fee, to even very small accounts. If you shop around, you should be able to find a firm that provides the level of advice you want and the payment method you prefer. 

Even with the new rule in place, how can you be assured an advisor is honest and trustworthy?

Unfortunately, there are no guarantees, and most of us don't have the financial expertise to second-guess the recommendations we get. That's why we hire a financial professional in the first place, right? It pays to be very careful on the front end to check out your advisor, including checking to see whether they have had a lot of customer complaints or regulatory sanctions. You can do that on BrokerCheck or IAPD. But you should also understand as much as you can about how your advisor gets paid and what conflicts they have that could bias their recommendations. Then make them explain their recommendations. Why does this make sense for you? If it sounds fishy, or your advisor seems reluctant to fill you in the the details, take a step back. You've got too much riding on this to ignore the danger signs. 

Something else to consider are other costs. How much closer (or farther) is the new house from your work? Will your commuting costs go up or down? Is the new house bigger or small than your current house? Will the utilities cost more? Maybe the new house has all new energy efficient items or maybe not? What about property taxes - are they similar? There are hidden costs you might not be considering.

Great questions. Thanks for sharing!

I'm thinking of switching my student loans from my current provider to get a lower rate. It turns out I can get a 4.9 (fixed rate) vs. my current variable rate (5.5). Should I go ahead and make the switch?

Just be sure you aren't losing any protections on your loans such as income based repayment options, deferment, etc. I'm guessing they are private loans and if so then you should be okay to move to lock in a lower rate. 

OP here: Thank you Michelle! We do not have any additional debt: Cars, student loans, and credit cards are all paid off. Thanks to a family gift, we will be able to keep 6 months in our Emergency Fund. We'll check out the calculator at bankrate.com and see what works best for us for paying off extra towards the mortgage principle once we get settled. Thank you again for all your great advice. I've learned so much in reading your columns about paying off debt over the years, and are happy we got to apply your advice in saving up for this new home.

You are so welcome. 

You are so wise to look into this now!

My employer sponsors a retirement plan for its employees. I am 48 years old and currently contribute 20% of my gross income to the traditional 401K so that I can take advantage of the maximum ($18,000 limit). Yesterday, there was a lunch'n learn presentation by a financial advisor who told us we should invest in the ROTH 401K plan instead of the Traditional 401K plan. since my employers offers both, I am confused as to why the ROTH 401K is the better option. When I met with my CPA earlier this year, she advised that I max out the traditional 401K plan. I am confused...

Any time an "advisor" tells a room full of people to take the same action I get suspicious. Without knowing your personal situation, how can they know what option is best for you? If you want a second opinion, you can and should get one. If it were me, I wouldn't act on the advice until I'd spoken to someone who had assessed my personal circumstances, and I'd make sure they didn't have a financial stake in the recommendation.

Ditto.

And by the way, keep in mind when you put money in traditional 401 (k) is before taxes, which means you are being taxed less on your current income. 

 

Dear Ms. Singletary, Your timely column today alerting to distinctions between financial advisers who are and are not fiduciaries invited readers to write to you. I am glad to do so since I’d welcome your take on what my financial advisor hasn’t answered yet. Here’s the brief background. Decades ago when I was a young government employee intent on setting aside for the future a modest pot of emergency or retirement money that I could ignore, I opened an account with Johnston Lemon & Co. here in D.C. William Barrett was the account executive who often called me with advice about buying bonds that would be good investments or selling ones at the right time. The arrangement worked very well for years. I was disappointed when the calls stopped, though, and years later I declined to sign up with him at the new firm to which he had moved. So, Johnston & Lemon recently assigned me to a different “financial advisor” with whom I have had sparse and rocky communications, and who has never called me with investment advice. My modest mid-5-figure account is about 82% mutual funds and 16% equities with the remainder in cash. I received from the new financial advisor a confusing five-page single-spaced letter purporting to notify me about the differences between brokerage and advisory accounts, among other things. That letter (“Cambridge letter”) is attached to this message. I called her and left a message that she did not return. I then wrote her a letter in April detailing my questions, and again have not heard back from her. That letter (“Drabick q’s”), too, is attached to this message. Is it time for me to move my account, or am I missing something? Thanks for insights you can share. Sincerely, Richard Roberts Decades ago when I was a young government employee intent on setting aside for the future a modest pot of emergency or retirement money that I could ignore, I opened an account with Johnston Lemon & Co. here in D.C. William Barrett was the account executive who often called me with advice about buying bonds that would be good investments or selling ones at the right time. The arrangement worked very well for years. I was disappointed when the calls stopped, though, and years later I declined to sign up with him at the new firm to which he had moved. So, Johnston & Lemon recently assigned me to a different “financial advisor” with whom I have had sparse and rocky communications, and who has never called me with investment advice. My modest mid-5-figure account is about 82% mutual funds and 16% equities with the remainder in cash. I received from the new financial advisor a confusing five-page single-spaced letter purporting to notify me about the differences between brokerage and advisory accounts, among other things. I called her and left a message that she did not return. I then wrote her a letter in April detailing my questions, and again have not heard back from her. Is it time for me to move my account, or am I missing something?

If you find yourself asking whether you should move accounts because you are unhappy with the level of service you are receiving, it's probably a good sign that a move is in order. It looks like you know the questions to ask. And the good news is that there are lots of firms that should be eager to take on a "5-figure" account.

...what was the rationale to targeting only retirement accounts? On the surface, and maybe I'm being too simplistic, this is only going to hurt anyone saving for retirement through increased adviser fees. Please clarify! And thank you so much for this chat

The Department of Labor only has authority over retirement accounts. A different agency -- the Securities and Exchange Commission -- would have to adopt a rule covering securities accounts, and insurance falls under the jurisdiction of state insurance agencies. So far, the Department of Labor is the only one to take action, although investor advocates have been pushing this reform for years. The good news is that, as a result of the DOL action, the strongest protections apply where they are most needed -- to the accounts working Americans rely on to fund a secure and independent retirement.

Shortly after you move into your new home, you will get mailings from companies offering to help you prepay your mortgage. They say since you get paid every 2 weeks (or 26 times a year), they will (for a fee) take 1/2 of your payment each payday so that will be 13 mortgage payments per year for you. DON'T USE THEM. They charge a fee and you can do this yourself - for free.

Yup. Totally agree. You can do it yourself for free. We pay our mortgage online and there's a box to make an extra payment whenever we want. We do and it's automatic as part of your regular monthly payment. 

I know. I know. We couldn't get to your question. So sorry.

But Barbara Roper has agreed to answer more offline. And I'll post in an upcoming column. So look out for it.

Thank you so much for joining me today. I'm off next week but chat returning the week after with a guest host, my colleague Jonnelle Marte. She's great so don't skip out on her. 

Take care and if you're still confused or having issues with your adviser about the new fiduciary rule please send me an email. I may not be able to answer you personally but your stories will help as I continue to write about this issue.

And please if you don't already sign up for my two weekly newsletters. They are free and come right into your email box.

And I have two columns a week on Wed. and Sunday. Read them and share. It's so important we all stay informed about money.

Take care and I'll be back in this space in July (taking some family time to vacation). 

In This Chat
Michelle Singletary
Michelle Singletary writes the nationally syndicated personal finance column, "The Color of Money," which appears in The Post on Wednesday and Sunday and is carried in more than 120 newspapers.

• Read recent columns
• Subscribe to Michelle's newsletter
• Color of Money Q&A Archive
Barbara Roper
Barbara Roper is director of investor protection at the Consumer Federation of America. In more than 30 years at CFA, she has been a leading advocate of strengthened protections for individual investors.
Recent Chats
  • Next: