Securities industry scare tactics designed to serve industry, not retirement investors

Millions of American investors put their trust in financial professionals every day to help them plan for retirement and other major life events. But when investors depend on financial professionals for their investment needs, they often don’t realize that those professionals may not be serving their best interests. That is because regulatory loopholes allow salespeople to pass themselves off as trusted advisers, without being subject to the appropriate standards to which those who provide money management or advisory services are traditionally held. Not being subject to the appropriate professional standards that accompany a position of trust allows these salespeople masquerading as advisers to serve their own interests at their clients’ expense. In practical terms, they can engage in self-dealing transactions, steering their clients into investments that maximize their own profits with little regard for whether they carry higher costs, more risk, and poorer performance for their clients than available alternatives. The financial consequences of this harm can be significant, as seemingly small cost increases compounded over a thirty- or forty-year horizon can decrease a portfolio’s value by tens or even hundreds of thousands of dollars. For middle-income Americans, the slow and steady siphoning of their nest eggs can be devastating. More on The Hill here.