Obama to announce retirement account change (pension, state, father, tax)
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I can see why and how financial advisors were basically mandatory in the past, as many people also had their financial advisor double as a stockbroker who would take actions in the markets on their behalf.
Pretty much anyone these days can open an account with an online broker and do the mechanics of it themselves. What you pay the advisor for is information, and that is also widely available as well.
The best person to take care of YOUR MONEY is YOU.
And if you don't know about investments then you need to take it upon yourself to learn about them before you retire and have a boatload of money that you now need to manage.
All during my working years I came upon countless number of folks in my company that had no clue about investments and stuck all their 401K money into whatever the newsletter told them.
I don't have a 401K but I can guarantee that my retirement money is greater than most peoples 401K. It also pays me an extra $2550 a month that I've never used in nearly 20 years. Once I invest that money that income could double. Our retirement is going to be sweet There are too many people out there unwilling to do the leg work and research to guarantee their retirement. Those that have the take me by the hand mentality deserve what they get. That would never work in my universe.
My concern is that pretty quick 'fiduciary responsibility' would be limited to some kind of government paper or just folding your assets into Social Security.
Mandating that retirement financial advisers hold fiduciary responsibility for their clients. I can support that.
I think this is absolutely fabulous. I just don't know how he's going to do that. When 9/11 hit, our financial advisers had moved from NY to FL. I called them IMMEDIATELY to move funds out of the market. They were on vacation and ignored calls. I wanted to sue them for not being available as the world around us all came a tumblin' down. They're allowed to be on vacation and there are obligations they should have since they were dealing with much of our money. But we'll see. I'm not holding my breath.
- competence in any field can be charted with a normal curve (most are mediocre),
- government regulations require interpretation,
- most have needs that change over time...
I would not count on this action to make it much easier to get sound financial direction unless you educate yourself to a certain extent and stay involved in your own investment decisions.
The proposals have pros and cons and as always the possibility of unintended consequences. Advisors need to make money and do so at the level they feel appropriate. If you don't have enough for their legitimate fee schedule they won't help you.
I think something like this is needed. My Father was steered towards a life time annuity at age 70 that he should not have taken out. His accountant scared him into taking it and than he died less than 2 years later, left 6 figures on the table and we aren't even sure if actually knew what he was doing when he took the annuity out. What was very upsetting to me was when I requested the break down of the annuity interest rate, fee's and commissions and nearly $26,000 was in commission and broker's fees and the rate was lower than the national average. That annuity was not a viable product, especially for a man my Father's age and for that amount of money. One money manager I spoke to told me that the word annuity is a bad word.
I totally believe in the advice of Clark Howard and he takes a dim view of financial advisers who sell stuff. He recommends getting advice from a 'fee-only financial adviser'.
I agree.
And these types of advisers already have a fiduciary duty to the person over the advisers interest, no new regulation needed. One of the problems with the wide brush of over regulation is that it will apply to brokers. They make certain products available at low cost, if you know what you want (from the fee-only adviser). So if you make regulation on brokers, the cost of those services/products go up since they will look for income elsewhere rather then the way they do it now from selling. Avoid buying products from the person that gave you "advice" to buy it.
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I don't have a 401K but I can guarantee that my retirement money is greater than most peoples 401K. It also pays me an extra $2550 a month that I've never used in nearly 20 years. Once I invest that money that income could double. Our retirement is going to be sweet 
There are too many people out there unwilling to do the leg work and research to guarantee their retirement. Those that have the take me by the hand mentality deserve what they get. That would never work in my universe.
