That old saying was one of my Dad's favorites when he was describing taking on a task for which one is ill prepared to complete. Such is the case with former President Obama's prodding the DOL to pass the so-called "Fiduciary Rule" requiring brokerages to adopt a fiduciary level of care for clients, but only for retirement accounts.
This is a great idea in concept, and one I embraced as the exclusive way we do business starting nearly seven years ago. Let me be clear, I run a fiduciary-only practice and am subject to a full fiduciary level of care for all client assets, not just retirement accounts. Clearly I think it's a great idea, but then why not all accounts? Why just retirement accounts? That leads me to a question on this hypothetical situation: let's say you inherited some shares in an IRA and you need some general advice on selling it and taking a distribution. What broker would take the risk to advise you when this arrangement oozes fiduciary liability for him and there is no long term advantage for him in an ongoing relationship? What happens if his advice turns out later to be wrong? The fiduciary envelope has no place in this type of situation. Would he charge a $29 commission for simply dropping a sell ticket? Not with fiduciary liability he won't. Maybe $500? This type of advice will suddenly get very expensive. This will drive clients into the fiduciary-only space where I live exclusively.