Bowing to pressure from the financial services industry the Obama administration weakens retirement advice rule, announced by the Department of Labor. The new rule intended to protecting retirement savers from profit-hungry brokers by setting a fiduciary standard for financial brokers and requiring them to put clients’ best interests before their own. As reported by Reuters, “unlike the draft proposal, the final rule does not restrict brokers from pushing proprietary products, splitting revenue with creators of funds they promote, or recommending risky, high-fee investments in alternative assets and certain annuities.” The final version also loosened guidelines on pay, allowing advisers to collect “common types of compensation,” such as commissions and revenue-sharing. Knut Rostad, an investor advocate who chairs the Institute for the Fiduciary Standard, said he was disappointed that the final rule was not tougher, calling it “a major defeat for investors, period.” As Financial firms continue telling common investors that we need Wall Street and money managers, investors have to educate ourselves about investing and personal finance. Cost is everything. The more we pay in fees, the less we have for ourselves. (reuters.com)
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