OPINION: Stop stealth savings stress; ensure retirement advisors put clients’ interests first
New Yorkers work hard and deserve the peace of mind that comes with knowing their future retirement nest eggs are invested soundly. But working New Yorkers — including about 1.7 million Brooklynites 25 and older — have something to keep them up at night: a loophole in the law that could be sapping their savings.
It needs to be closed.
Retirement accounts and 401(k) plans often involve complex financial decisions, and many working people rely on investment professionals for guidance. We should be able to trust our financial advisers to put our interests first. Many investment professionals do so. But this legal loophole is allowing some on Wall Street to make higher profits for themselves by taking advantage of hard-working Americans through recommendations of risky investments with high fees and low returns. Some examples: rolling over 401(k) savings into IRAs with higher expenses and investing IRAs in variable annuities that charge high fees, lock up money for years and provide no tax benefits beyond what the IRA already offers.
The result? Americans lose out and Wall Street makes billions.