If you are working with a financial advisor for help with your IRA, 401k, or other qualified retirement accounts, then you will benefit from an important newer rule, which makes it clear that financial advisers for retirement accounts have a legal obligation to always act in your best interests.
The fiduciary rule, as it is often called, is an important win for consumers. Previously, financial advisers for retirement accounts were allowed to recommend products that put their own profits ahead of their clients’ best interests. This often led advisers to recommend expensive investments that offered big fees to brokers, but offered smaller returns to investors.
According to the U.S. Department of Labor, this conflict of interests cost investors about one percentage point lower annual returns on retirement savings, and $17 billion in losses every year. The fiduciary rule is designed to put an end to these conflicts and protect investors from bad investment advice that hurts their retirement savings.
Generally, a fiduciary is a person who acts on behalf of another person, and who is always required to act in that person’s best interests. Now, because of the new fiduciary rule for retirement accounts, all financial advisers have a legal duty to provide advice that is in your best interests when helping with your retirement accounts.
Because of this change, retirement savers get better advice and better investment returns. In fact, it has been estimated that the new fiduciary rules will save investors as much as $40 billion over the next ten years. That’s more money in your retirement account and less in your broker’s pocket.
If you think that your financial adviser has put their interest ahead of yours and caused you to lose money, call us today for a free consultation and to discuss your rights as an investor.