When looking for help like the Joslin Rhodes financial services, it’s important you do your research into the company to ensure they are reliable and have your best interests at heart. If you just get help from the first company you find, you may find they’re only in it for themselves. The Department of Labor recently issued a rule that investment advisors must act in the best interests of retirement savers that would prevent stories like this, as related by Rep. Tammy Duckworth (D-IL):
A RETIRED mechanic and a fourth-grade teacher from my home state, Russell and Christine Kazda, are having a tough time getting by. While Mrs. Kazda still teaches, Mr. Kazda suffered an injury last year and retired early after a 30-year career. Over the years, the Kazdas did what they were supposed to do and saved for retirement. They made it clear to their retirement advisers that they wanted to invest conservatively – then they had to dip into their savings earlier than expected.
The Kazdas are struggling not because they didn’t save enough but because, in their own words, they “naturally assumed” that the financial professionals advising them “were acting in our best interests” when urging them to transfer $172,000 of their retirement savings into investment products falsely peddled (according to a legal claim they have filed) as low-risk.
The Kazdas didn’t know their advisers were pocketing almost 10 percent in commissions by aggressively selling them inappropriate investment products. After a few years, their life savings had fallen by $125,000.
A mere drop in the bucket according to White House Council of Economic Advisers who estimate that Americans lose an estimated $17 billion in retirement investments every year due to the bad advice they get from investment counselors who, none the less, profit from that advice. Thus the new rules
This set off a firestorm of protests from the investment community, the GOP held congress and the US Chamber of Commerce who all want to make sure people keep losing their money. The Senate and House passed a bill to roll back the regulation claiming that the rule would “raise the cost of professional advice and prevent middle-to-low income Americans from building a nest egg for the future.” Needless to say, President Barack Obama vetoed it. The GOP does not have the 2/3 majority to override. That hasn’t stopped the Chamber of Commerce to do its level best to steal from 99%. There are now five lawsuits in federal courts over this rule.
In a segment of his HBO show “Last Week Tonight, ” John Oliver explains how these 401k scams work and how the fess that are charges are eating your investments like “termites.”
Most Americans have no idea what they’re doing when it comes to financial planning. How exactly funds and fees and interest work is confusing as hell, and few have the time or energy to sort through the the implications of investing in this versus that. It’s something many Americans choose to leave in the hands of professionals, but as illustrated on this week’s episode of Last Week Tonight, the professionals may not always have your best interests in mind, and even when they do, they might not be much more helpful than a cat throwing a toy mouse at a grid of companies.
Americans hold a combined $24 trillion in retirement assets. If you choose to trust yours with a financial advisor, tread carefully. It may seem complicated, but it doesn’t have to be.
Like Rep. Duckworth, I find it baffling to believe that requiring retirement advisors to act in the best interest of the investor “creates ‘unwarranted burdens’ for financial advisers.”