Your financial advisor should be giving you advice in your best interests. Unfortunately, some “advisors” are only salespeople who are selling investments that result in high fees and commissions for themselves, lining their pockets rather than maximizing your retirement savings.
We all know how difficult it is for average people to scrape together extra dollars designated for a retirement account. In Colorado, fewer than half of employees in the private sector have access to a retirement account through their employer. There are a confusing number of choices and options for working families to save for their post-working years, which makes it imperative that the financial advice they receive be financial advice they can trust.
Which is why it is perplexing that the federal government is now trying to roll back the “fiduciary duty” rule that would require your financial advisor to give you advice based on your needs, not theirs. It’s only commonsense that we would expect financial advisors to give us advice based on our best interests.
Some financial advisors have decided to go the extra step and hold themselves to a higher standard: working only on behalf of their clients’ best interests. This is commonly referred to as a fiduciary standard. The best way to find out if that is what your advisor is doing is to ask. Ask if they are a Certified Financial Planner, ask if they adhere to a fiduciary standard, ask if they have any conflicts of interest, as an example, will they receive more compensation selling you one investment over another. If you get a complicated answer or they are not clear in their responses, you may want to think about changing your financial advisor.
In the next couple of weeks, Congress is going to vote on what is being called the “Choice Act,” which actually rolls back many of the consumer protections put in place by the Dodd-Frank Act following the recession. There are many provisions in the “Choice Act” that will hurt consumers, but among the most egregious is eliminating retirement advice protections.
We are heading toward a generation of people with no retirement savings and putting more challenges in their path makes no sense. Without some kind of retirement security in place, an increasing amount of public resources will be dedicated to retirees’ safety net.
Please let your Congressional representative know they should vote on your behalf, in support of the people who live in your district who want to save for retirement. Big financial institutions and insurance companies don’t need help – average families do.