1 Example When Cost of Regulation Harms Investors
Edward Jones has recognized that for many of its investors, the life-time costs in a fee-based account are dramatically greater than those incurred in a one-time commissionable transaction paid at point-of-sale (especially for investors with large holdings invested through the BD, but true also for emerging investors who 'buy-and-hold').
It was reported that Post DOL Fiduciary Rule, Edward Jones no longer offers mutual fund share classes with POS commissions for IRA products (covered by the Rule) [presumably since commissions paid in such funds are inconsistent from one fund company to the next, making compliance much more difficult]. [Only stocks, bonds, variable annuities, and CDs can be used as their commissions are set to be consistent, according to the report.]
So, for investors savings for retirement, with planning horizons of 30-50 years: instead of paying a one-time commission, they may be pushed to fee-based accounts [where they can own funds and ETFs]. In such accounts they are charged 1%+ of AUM each year - for 30-50 years -- how can it be better?
Unintended consequences? Naive assumptions?