Do You Think Your Advisor Should be Required to Put Your Best Interests First?
On a recent episode of Redefining Retirement, we covered the topic: Is Your Advisor Acting In Your Best Interest?
In this episode we discussed a rule proposed in the fall of 2010 that would require all financial professionals to put their customer’s interests before their own, whenever dealing with retirement accounts. At that time, the financial services industry lobbied hard against the new rule and the Department of Labor pulled back their proposal for future review.
A fiduciary is a financial advisor registered with the SEC (Securities and Exchange Commision) and held to act in the “best interest” of their clients. “But brokers for the most part are held to a different standard, of "suitability.”
“You can satisfy a suitable recommendation by recommending the worst of what's suitable," she says. "If a variable annuity is suitable, you can recommend a variable annuity offered by a shaky insurer with sky-high fees and poor investment choices.”
When you meet with a financial advisor, shouldn’t you be able to trust that they are giving you advice based on your best interests? After all, this is your life savings we are talking about.
Next time you talk to your financial advisor ask them if they are acting in your best interest, if they would be willing to sign a pledge that says they will act as your fiduciary at all times with all products. It’s really just as simple as that. If they cannot or will not, we strongly urge you to consider whose best interests they have at heart.