The investment advice given by retirement planners has long been a source of contention for elder law advocates. Many advocates fear that, with little oversight of retirement advisors, those advisors often steer clients to risky investments that benefit the advisors more than the clients. This has the potential to leave elderly people vulnerable and without the retirement nest egg they were expecting to have.
The Hill, in a recent article entitled "Retirement advice rule nears White House approval," reports that the Obama administration is expected to give approval for a new rule designed to fix the problem.
The rule would make retirement advisors "fiduciaries" of their clients. This would legally require advisors to act in the best interests of their clients. As a consequence, advocates reason that advisors will not steer clients to investments that benefit advisors more than clients if they advisors can be held accountable.
However, this proposal does have its detractors.
Republicans in Congress have sought to stop it, but have so far been unsuccessful. They believe that the rule will make getting retirement advice more difficult and more expensive.
New rule or no new rule, one way you can protect yourself from bad retirement advice is to avoid planning for retirement in a vacuum.
Retirement planning can be done at the same time as estate planning. Allowing retirement planners and estate planning attorneys to coordinate and work together on your behalf provides an extra level of protection.
Reference: The Hill (Jan. 29, 2016) "Retirement advice rule nears White House approval"