Articles Tagged with savings

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.

This week, the attorneys at Malecki Law sent letters to several United States Senate and House of Representatives members, urging them to support the Department of Labor’s (DOL) proposal to hold financial advisors to a higher standard and act in the best interest of retirement investors. These members of the Congress include the Honorable Charles E. Schumer, the Honorable Jerrold Nadler, and the Honorable Kirsten E. Gillibrand.

Millions of Americans have worked their whole life to build a retirement nest egg and count on their retirement savings to support them through their golden years. The DOL’s proposal addresses loopholes in the current rules that make it far too easy for some advisers to take advantage of these hard-working Americans and line their own pockets with retirement savings. Our system is so broken that brokers often can and do put their own interest in commissions above the interests of their clients, causing them to be in unsuitable products just so the broker could earn additional commissions.

When someone turns their life savings over to someone for advice, they believe their financial adviser is going to do what’s best for them.  We have never heard a client recount a story of a financial advisor that told them that they are not fiduciaries, in fact, we hear just the opposite.  We all see the advertisements on television that say the financial advisers are there to help us, but we need to know that financial advisers are obligated to put client interests first, as well as be able to receive that assurance in writing.

As the U.S. baby boomers look toward retirement, a larger percentage of the population will become senior-aged individuals who will have a substantial amount of savings that may be used to fund investments.  It is more important than ever to keep in mind that everyone needs to take as much care over their retirement nest egg now as they did when they were diligently saving.  The New Jersey Bureau of Securities has issued a new release to commemorate World Elder Abuse Awareness Day and remind senior-aged investors to be wary of financial fraud.

In the news release, the NJ Bureau noted that one in five Americans over the age of 65 are victims of financial fraud, making it one of the fastest growing forms of elder abuse.  However, the news release noted that anyone over than 55, whether working or retired, may be viewed as a potential target for financial fraud.

The NJ Bureau of Securities listed several types of financial fraud to be careful of, including: