A couple weeks ago, I discussed the financial reform that is being considered by Congress, and how it would affect you. The specific financial reform issue that relates directly to the consumer is whether or not securities and insurance sales representatives who give advice on investments are required to be a fiduciary to their clients. A fiduciary is defined as someone who acts in utmost good faith, in a manner he or she reasonably believes to be in the best interest of the client.
Well, there’s been a change in the proposal, and it’s not good for consumers. The financial reform introduced last week by Senate Banking Committee Chairman Christopher Dodd, D-Conn., dropped an earlier provision that would have imposed a fiduciary duty on anyone offering advice on investments. Here is an article discussing the most recent developments.
If you are currently paying for investment advice, make sure to ask your advisor if he or she is willing to act as a fiduciary for you – and make sure to get it in writing. If they are unwilling to put it in writing, you should be extremely cautious, no matter what reason they give you for not doing so.
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John P. Chladek, MBA, CFP® is the President of Chladek Wealth Management, LLC, a fee-only financial planning and investment management firm specializing in helping families and couples who are not yet retired realize their financial goals. For more information, visit https://www.chladekwealth.com.