"Conflicted investment advice" costs Americans $17 billion a year!

Too many consumers follow the advice of financial "advisers" who are really salespeople working on commission.
"The math here is:

• There's about $1.7 trillion in individual retirement accounts invested in funds that pay brokers to recommend them.
• The people who invest in those funds could improve their performance by about 1 percentage point a year by switching to other funds that don't pay brokers." Matt Levine explains: "The way that a lot of retirement investing advice goes is that you go to your broker and ask him what you should invest in, and he says, "Oh Fund XYZ is great, put all your money in Fund XYZ," and the reason he does that is not that he loves Fund XYZ in his heart of hearts, but rather that Fund XYZ writes him a big check for steering you its way. I'm sorry, but that is the way it works. I mean maybe he also loves it in his heart of hearts, but that is not observable; the check is. As is Fund XYZ's subsequent underperformance versus its benchmark." If your financial adviser is NOT a fiduciary, then you are losing out. Not all financial professionals   act entirely in your best interest. While investment advisors are required to follow a principle known as the fiduciary standard, brokers are only required to recommend "suitable" investments. Details on the fiduciary standard at: http://www.cnbc.com/id/102447585.  Read more detail from Levine: http://www.bloombergview.com/articles/2015-02-23/white-house-is-not-fond-of-backdoor-retirement-payments

Fighting Financial Fraud

Red Flag of Fraud: Social Consensus
Fraudsters use all kinds of tactics to get you to give them your money. One of these tactics is called social consensus, which is when the fraudster tries to make you believe that other savvy people are already investing in a product or that they endorse it. Watch this short video to learn more about social consensus and how to avoid it. Brought to you by FINRA.

Fair Divorce Decisions

Fair Divorce Decisions http://www.fairdivorcedecisions.com/
Laurence Kotlikoff, an economics professor at Boston University, started a sideline business to sell financial-planning software more than 20 years ago. When he recently went through a divorce he used the ESPlanner software to weigh proposed financial settlements and their impact on bothspouses. Now Mr. Kotlikoff and his firm, Economic Security Planning, are offering this type of analysis to others via the website FairDivorceDecisions.com.
“The service is geared to individuals and couples undergoing a divorce as well as to professionals such as lawyers, mediators and financial planners. For $500, users get a detailed analysis of four possible divorce settlements, focusing on the living standards that the two individuals can expect for the rest of their lives. Analyses of additional proposals cost $125 each.” “Users supply information including: the spouses’ current ages and expected retirement dates; taxable and retirement-account assets; salaries; post-divorce housing arrangements and costs; and entitlement to Social Security and pensions. The analysis includes the tax implications of different financial arrangements and also strategies to maximize Social Security benefits (the subject of a separate service Mr. Kotlikoff’s firm sells).” Quoted from The Wall Street Journal, “A New Way to Reach an Equitable Divorce Settlement” Feb. 5, 2015 by Karen Damato.

How to live a happier financial life

As a long-time Wall Street Journal reader I've followed and shared the financial wisdom from writer Jonathan Clements.  He packs a lot of excellent (research-based) advice in this final column for the WSJ Sunday edition. Follow his advice and you will lead a happier life.

Biggest time waster: commuting

Best investment attribute: humility

Key to financial success: cheap housing

Best way to spend money: experiences

Top financial goal: not working for money

Read the details at: http://on.wsj.com/1DQhLnQ

Buy his money guide at: http://www.jonathanclements.com/money-guide/