New Fiduciary Rule to Protect Retirement Investments

This week, it has been reported that the Department of Labor proposed tougher laws after issuing new regulations requiring financial advisors and brokers managing 401k and retirement accounts to act in the best interest of their clients. These rules were proposed a year ago and after deliberating on it for a year, the White House has finalized these tougher requirements. However, it might be a year before these rules go into effect.

An academic study commissioned by the White House revealed that “conflicts of interest” in financial investing was costing Americans about $17 billion a year in retirement savings. Although brokers are required to only recommend “suitable” investments under the current “suitability standard”, they can push a more expensive product that pays a higher commission than a cheaper fund that would be equally appropriate for that investor.

The new rule fiduciary rule is aimed to at reducing fees and commissions that erode retirement savings and hold brokers to higher standards. It will cast a wider net on who is subject to the fiduciary standard.

Malecki Law has been instrumental in championing investor protection and resolving disputes between advisors and clients through FINRA arbitration panels and mediations.

As reported in our blog, academics Mark Egan, Gregor Matvos and Amit Seru recently released a report titled “The Market for Financial Adviser Misconduct” on financial advisers and misconduct. According to this report, breach of fiduciary duty accounts for approximately 7% off total reported misconducts in the United States


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