"SHOCKING: Biden Admin's New Pension Rules REVEALED - You Won't Believe #3!"

 Figuring out how to save for retirement is challenging. Unfortunately, if you want to turn to a professional for financial advice, that creates its own complications.

Source : Google.com/images.app.goo.gl/JCbCDNcUqrSm9en46

That's because there are many types of professionals, such as certified financial planners, investment advisors and financial advisors, and there are different regulations governing each. Trusting the wrong person can have devastating consequences.

Jeff Bezos told his brothers to invest $10K in his startup called Amazon, and now their shares are worth over $1 billion – 3 ways to get rich without having to bet on risky public stocks

Car insurance rates have soared in the US to an astonishing $2,150/year – but you can be smarter than that. Here's how you can save as much as $820 per year in minutes (100% free)

These 5 magic money steps will propel you up America's net worth ladder by 2024 — and you can complete each step in minutes. Here's how

The good news is that the Biden Administration has stepped in to give investors more protection from conflicts of interest. The recently finalized Retirement Security Rule aims to ensure these professionals are actually working for the clients they serve. This rule is not without controversy, as some argue it could actually make getting help more difficult.

To understand how these rules may affect you, read on for five key facts.

1. More advisors will be considered fiduciaries

A fiduciary is a person who is legally obligated to act in the best interests of the person whose money or property they manage. They hold themselves to high standards so people can trust them.

You might assume anyone who provides financial advice in a professional capacity is a fiduciary. That doesn't happen under the current rules.

Currently, those who offer one-time financial advice are not considered fiduciaries, nor is a fiduciary standard required for those who provide advice to workplace plan sponsors about 401(k) lineups or to anyone who provides recommendations for purchasing non-securities, such as real estate. estates, fixed income annuities, or commodities such as gold.

"This rule closes the loophole for one-time advice," says the US Department of Labor Fact Sheet, adding that financial services providers often have a "strong economic incentive" to recommend that investors roll over their workplace retirement accounts into either IRAs or institutional annuities they.

The Retirement Security Rule expands the definition of fiduciary to include financial service providers who are compensated to provide advice to individual retirement account holders, employers and plan fiduciaries.

2. It requires an investment advisor to work for you

The new rule also clarifies the exact duties an advisor owes you when acting in their fiduciary role. Their obligations include providing advice namely:

Discreet: Meets professional standards of care.

Loyal: Your interests come first and the advisor clearly discloses potential conflicts of interest.

Honest: The advisor does not misrepresent any information

Reasonable pricing: Advisors cannot overcharge you or accept unreasonable or excessive compensation.

3. It could save Americans money

When investment advisors act in consumers' best interests – rather than recommending investment products for large commissions – consumers can save. Exactly how much depends on what you are investing in.

Morningstar, Inc. estimates that participants in workplace retirement plans could save as much as $55 billion in the next ten years thanks to the Retirement Security Rule. It says more than 80% of these savings will be experienced by small plan participants, of which there are currently more than 20 million. Investors could save up to $5 billion a year lost due to conflicting investment advice on fixed index annuities, according to the Council of Economic Advisers.

4. It can make accessing advice more difficult

The rule sounds pretty good so far, so why is it controversial?

A number of lawmakers and industry groups argue it could actually make accessing retirement advice more difficult for the average American.

"This leaves retirement savers with fiduciary advisors as their only option for professional financial guidance," according to a statement by the American Council Of Life Insurers. "Fiduciaries typically work with clients with a minimum of $100,000 to invest, far more than most working-class Americans have in savings."

Senator Joe Manchin also warned in a statement, "If allowed to take effect, the rule has the potential to cause many West Virginians to completely lose access to investment advice because of how broadly it defines fiduciaries. Hard-working West Virginians and Americans need protection, not uncertainty in terms of their long-term financial security, and they certainly do not want or need the federal government to be more involved in their personal retirement decisions."

5. Comes into force in September 2024

If you're hoping these new safeguards will keep you safe from bad advice, don't call an advisor just yet. These rules go into effect on September 23, 2024 although it will be another year beyond that for all requirements to take effect.

Once the rules are in place, you can feel more confident that the professionals you hire will act in your best interests. However, it is still important to research any provider you are taking advice from and to understand how they charge and what their legal obligations are to you.

The right advisor can make all the difference in building your financial security, but ultimately your money is at stake so doing your due diligence is essential.

Share this post