from Outsider Club:
If I told you that there was an “Obamacare for Your IRA”, would you rush to sign up?
I didn’t think so… but it may be coming whether you like it or not.
You see, government regulators have started pushing a plan to squash any and all financial and investment advice that it deems “incorrect.” The decision could essentially force financial advisors to forbid recommending to you precious metals, real estate, collectibles — or basically anything the government doesn’t want you owning.
The Labor Department is attempting to expand the definition of “fiduciary” under The Employee Retirement Income Security Act of 1974 (or ERISA). A fiduciary is a person who holds “a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other asset for another person.”
You’d like to think that anyone handling your money should have a clear loyalty to you, but if you’ve been reading these pages for any amount of time, you’d know that just simply isn’t the case. Financial planners, brokers, and the like will more often than not push you into investments that reap higher commissions for them — even if it’s not in the best interest for you.
That’s one reason the Labor Department is arguing that investment advisors should all have to sign themselves up as a fiduciary in order to do business. Considering the current situation, that may not sound too bad on its surface…
Currently, the law says brokers, insurance salesmen, and financial advisors can operate under the “suitability standard”, and are merely required to “ensure an investment is suitable for a client at the time of the investment.” That means they aren’t legally required to divulge conflicts of interests — like the fact that they may be paid more for certain types of investment vehicles.
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