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New proposal for individual retirement account advisers

Financial advisers, who are entrusted to give the best advice possible to their investors, have gotten a bad name. Just like in any business, there are good and bad. Because some financial advisers have overstepped the bounds of good faith and given poor advice in an effort to make their own commission larger, it has facilitated tarnishing the reputations of good advisers also, who are working hard for their investors.

This issue has brought a new proposal to the table by the Department of Labor. The proposal isn't really new, as it was put into place for pension plans in 1975, before individual retirement plans, such as 401k's were being used. The proposal is to extend that law by saying all investment advisers for individual retirement investment accounts must put their clients' best interest at the forefront, ahead of their own. There will be a public hearing held on this proposal Aug. 10, 2015.

The Council of Economic Advisers reported a loss of over $17 billion each year for individual retirement investment accounts due to conflicting advice given to clients by their financial advisers. This law is not really new; it was proposed back in 2010, but the investment industry put the brakes on it with a strong opposition. In reality, it may not really even be needed because the U.S. Securities and Exchange Commission already holds advisers accountable to meet the standard of "best interest"of their clients.

Whether you are a financial adviser being accused of bad faith, or a client of a financial adviser and feel you have been advised in bad faith, you should seek legal advice. No one should be ruined in reputation or in his or her life's savings by ill treatment for another.

On another note, if you are avid about your retirement plan and your investment savings, you should be just as avid about ensuring you have a will or trust in place. Your retirement plan may keep you comfortable in your golden years, but what about your family? You also want to ensure they are protected if something happens to you. Contacting an estate planner can take care of this for you.

Source: Billings Gazette, "Gazette opinion: Who is acting in U.S. retirees’ best interests?," June 29, 2015

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