April 25, 2016
On April 6, the U.S. Department of Labor (DOL) released a rule that requires financial advisors to recommend retirement investments based solely on what is in the client’s best interest. The final rule is the product of a year-long process that included input from a range of interested parties including investors, financial firms and investment managers. With this rule, the DOL seeks to ensure that people receive advice that is in their best interest at the lowest possible cost.
Advisors with clients in retirement plans and individual retirement accounts (IRAs) will now be held to a stricter legal standard — defined as acting solely in a client’s best interest and avoiding conflicts of interest. While we believe the vast majority of advisors already do this, the law previously held them to a less rigorous standard that required only that they choose suitable investments for their clients.
The DOL plans to begin implementing parts of the rule in April 2017.
American Funds has been actively preparing for this rule as part of our ongoing commitment to investors and their goals. And we are working with advisors to provide them the resources they need to best serve their clients.
For more than 80 years, American Funds has focused on putting shareholders’ and clients’ interests first. Our primary goal is to provide investors with consistently superior long-term investment results. Our low management fees are a crucial element in achieving that goal.
We encourage you to contact your advisor if you have questions about the DOL rule and how it may affect your account.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.