As a member of the National Academy of Elder Law Attorneys (NAELA), we were alerted to a new regulatory law being proposed by the Obama Administration. It bears directly on your investments, which are determined by financial advisors for many of us. As an attorney, I must place the interest of my client first. I know ever Bar Association in which I have been affiliated requires this policy, ethically and legally. I could never place the interest of a law firm or company in which I'm affiliated before the client as an attorney.
Based on what I have discerned, financial advisors can do just that - place their affiliated company's interest prior to the client's. Thus, investments selected for their client may be subservient to the financial interest, gains, fees, etc. of the affiliated company. The proposed regulatory law creates a higher standard for investment advice offered to the retirement individuals by their advisers. The new regulations require brokers or their agents to put their client's interest ahead of their own. Presently, brokers and their agents can sell an investment to a retirement saver as long as it is "suitable", even if a less expensive or less complicated product is available. This regulation appears soundly fair and prudent for the treatment of the individual financial client.
Unfortunately, financial greed has again reared its ugly head. Groups representing Wall Street and the financial industry have joined forces with financial professionals to file a legal challenge against this new regulation. A lawsuit was filed in June in Dallas by the Financial Securities Roundtable, the Securities Industry and the Financial Markets Association among other business groups to block the creation of this higher standard of practice by the financial professionals.
I would urge you to contact your financial broker or agent to determine their position on this lawsuit and why this regulation, which benefits you as a client of the broker or financial representative, is being opposed by their industry. In my mind, this lawsuit perpetuates "conflict of interest" to benefit the financial industry.