Does your financial advisor put your interests before his/her's?

The term "fiduciary" has been in the news for past couple of years. The Obama Administration proposed a rule that financial advisors who deal with retirement must follow a fiduciary standard rather than a "suitability" standard. A fiduciary must put the client's interests ahead of her/his own (i.e., costs, commissions, etc.); previously most advisors only had to recommend products that were "suitable" for the client (but perhaps were more costly than other alternatives, thus paying the advisor a higher commission and costing the consumer higher fees and lower returns). The Trump administration has rolled back this rule.

Therefore, it is essential that consumers ask their advisor: "Are you a fiduciary? Are you putting my best interests ahead of your financial gain?"
Read Peter Fisher's article:

Why Conflicting Retirement Advice Is Crushing American Households

In a 2015 report by the Council of Economic Advisers, the authors estimate that “the aggregate annual cost of conflicted advice is about $17 billion each year.” This conflicting advice comes from individuals and institutions that are "compensated through fees and commissions that depend on their clients’ actions. Such fee structures generate acute conflicts of interest." (full quote).

"Unfortunately for the American family seeking 'professional' financial advice, the choices are few. Just a small percentage of financial professionals are able to offer financial advice without facing the conflicts outlined by the Council of Economic Advisers." 

Very few are "fee-only advisers who follow a true fiduciary standard that prohibits commissions on products recommended to clients and legally requires the advisers to always put their clients’ interests first." 

Check out a list of questions you should ask your advisor at: https://www.forbes.com/sites/forbesfinancecouncil/2018/08/17/why-conflicting-retirement-advice-is-crushing-american-households/#470655621355