By Mary Grace Musuneggi
If you own any kind of investment vehicle or retirement plan, or you participate in a 401k, you may have heard, or will certainly hear soon, about new government regulations from the Department of Labor (DOL) that will affect how people in the financial world do business. The word being thrown around is “fiduciaries.” This means that people in financial services have to put the client’s needs before their own.
Now you may be saying, “isn’t that the way it always had to be?” Well, no. Some advisors may not have had the best interests of their clients in mind, nor were they required to. As the law currently stands, broker dealers, insurance salespersons and investment advisors operate under the “suitability standard,” which merely requires that an investment is suitable for a client at the time of the investment.
This contrasts with the “fiduciary standard,” which requires advisors to avoid conflicts of interest and operate with full transparency-including doing at all times what is in the best interest of the client. We at The Musuneggi Financial Group are proud to say that we are fiduciaries and have always practiced this way.
In addition to these new rules will come potential changes for investment managers, fee arrangements, mutual funds, investment accounts, retirement plans and financial planning services that you need to be aware of. There can also be a significant impact for small investment accounts.
You may have recently seen some significant changes to your company 401k’s. This may be the result of the impending DOL rule changes. You may have learned that a company with whom you have investments is eliminating their advisors or specific products.
Besides these new laws there are also potential changes in the economy, including impending changes to health care laws, interest rates, and government programs. We are therefore recommending, more than ever, that it is time for all investors to talk with their advisors and review their financial plans and investment programs. Outdated plans have no real value for you or your family, and you need to be assured that your personal programs are appropriate.
Some things that you should consider:
- Are you on track for financial independence at retirement?
- How do you pay for investment advice?
- Do you understand all the options available in your employee retirement plans?
- Are you taking advantage of all of the tax benefits available to business owners, if applicable?
- Do you have access to the most beneficial investments and financial services for you situation?
- How will you be paying for your children’s education?
- Are all of your estate planning documents and beneficiaries up to date?
- Do we have a copy of your Power of Attorney?
- Is your 401k or savings plan professionally managed? Or are you just picking investments at random?
- With the changes in the economy, should your asset allocation be adjusted?
- Have you retired, changed jobs, or had any other life change?
Just a reminder that all financial planners can offer the same services. It is how they offer them today that will truly matter. We believe that it’s the relationship that exists between you and your planner that makes all the difference. At The Musuneggi Financial Group, our clients and their families are our business, and our business is to treat them like family.