Teachers Are Vulnerable
The Department of Labor (DOL) has approved a rule, that will become effective April 2017, that holds all financial advisors to a fiduciary standard of care when providing investment advice on retirement accounts and IRAs . This means an advisor must recommend what is in a client’s best interest when it comes to selecting investments, determining reasonable fees, and appropriately disclosing those fees.
One segment of the retirement market that is not affected, or protected, by this new legislation are public school districts’ 403b plans. These plans are a type of defined contribution plan and are typically offered to teachers, administrators, school bus drivers, school custodians, and the employees of other tax-exempt organizations such as ministers. Industry providers are notorious for creating an environment fraught with multiple vendors with high fee investment products who camp out in lunchrooms and cafeterias to try to make a sale.
The saddest part of all this is these teachers and other employees don’t even realize that they are not getting unbiased, cost efficient investment advice for growing their retirement nest egg. They are at the mercy of whoever is sitting in the cafeteria that day giving them 15 minutes of financial advice. Oftentimes, participants are given a false sense of security with inaccurate or incomplete explanations of riders offering guarantees that are not at all what they seem. In addition, sales representatives have open access to sell other products to employees, often a similar high priced product in after tax accounts.
Those who teach our children day in an day out surely deserve the same fiduciary level of care as any other American worker. We believe in your right to a successful retirement after years of dedication to our children.
For a complimentary evaluation of your 403b plan contact an industry veteran, Kathleen Nolan and experienced 403b advisor, Richard Feola at Family Focus Financial Group.
Kathy Nolan is the President and Owner of Family Focus Financial Group and has been in the financial industry for 40 years. Today, Kathy maintains her insurance practice and the fiduciary standard of Investment Advisor Representative, a series 65 licensed registration, with Global Financial Private Capital, an SEC Registered Investment Advisory Firm.
*Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Advisor. Global Financial Private Capital and Family Focus Financial Group are not affiliated companies. Not intended for specific legal or tax advice. Any views expressed are for information purposes only and should not be construed in any way as an offer, an endorsement, or an inducement to invest or purchase insurance products.