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.


This week an article in The Wall Street
Journal called A Decision Nears on Fiduciary Standard, discussed the debate over broker-client dealings
and whether brokers should be held to the
“best interest” standard, otherwise known as the Fiduciary
Standard.
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.” 

Barbara Roper, the director of investor protection at the Consumer
Federation of America, argues her concerns with the suitability standard and belief
that, “those dealing with a broker are under the misconception that
they’re dealing with a financial professional legally obligated to put their
best interests first; that’s not the reality”

“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. 

At Cornerstone Retirement Group we are fiduciaries,
and in our eyes, every client deserves to have their needs put first and solutions
offered according to those needs. If you would like to visit with us
to review your retirement plan, give us a call at 775-853-9033.