New Rule Requires Retirement Advisers To Disclose Kickbacks

The new "fiduciary rule" should help investors feel more confident in their retirement investment choices.
SMS
New Rule Requires Retirement Advisers To Disclose Kickbacks

Lawyers are required to give advice that is in their client's best interest. The same is true for doctors and their patients. And now that rule also applies to financial advisers. 

The U.S. Department of Labor announced the new "fiduciary rule" that requires financial advisers to disclose any conflicts of interest related to their investment advice.  

Before the updated rule, advisers were allowed to recommend investments that earned them kickbacks without disclosing that information. That conflicted advice meant families lost an estimated $17 billion each year in their retirement savings. 

"He knew that my husband was sick, and I had a mentally challenged daughter. He would have been the last person that I would have thought would have mishandled my funds. ... We had lost almost $400,000," a woman who turned to a trusted friend for financial advice said

Advisers will still be allowed to accept commissions and bonuses, but they will be required to disclose that information to the investor. The rule goes into effect April 2017. 

This video includes clips from U.S. Department of Labor

Featured Stories
George W. Bush takes questions from reporters in the Rose Garden at the White House.

George W. Bush Praises The Media As 'Indispensable To Democracy'

Jeff Sessions

Democrats And Republicans Want Russia Probe — Without Jeff Sessions

"La La Land" producer Jordan Horowitz reveals correct best picture winner at Oscars.

The Oscars Pulled A Steve Harvey And Crowned Wrong Best Picture Winner

Want to see more stories like this?
Like Newsy on Facebook for More Business Coverage