#176 Managing Money: As Easy as Brushing and Flossing


Why does the financial services industry have to complicate our lives? The good news is that once we get you set, managing your money should be as easy as brushing and flossing, perhaps helped by a couple of trips to the dentists each year. While there are so many ways to simplify your financial life, sometimes the industry really does make it hard.

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Lori's call about being sold two variable annuities is a case in point and allowed me to discuss the concept of  fiduciary standard, which requires financial professionals to act in the best interests of their clients. You may think that any broker or insurance agent is obligated to do so, but they are generally held to a much looser standard, called “suitability.” In other words, the product or advice they are providing needs only to be suitable for you, rather than in your best interests. The sale of variable annuities to Lori may have been "suitable", but it was most certainly not in her best interest. 

Not surprisingly, the Securities Industry and Financial Markets Association (SIFMA), the trade association that lobbies on behalf of the financial services industry, has opposed imposing regulation that would be too strict, because it would “limit consumer choice”. The more cynical will note that the fiduciary standard would put a big dent into commissions generated by firms and their salespeople, especially those who recommend fee-rich products inside rollover accounts. Sadly, the industry lobbyists have spent oodles of money and as a result, the fiduciary standard, which should have been adopted in the aftermath of the financial crisis, is now on hold until 2016 at the earliest.

Also on the show, some 529 info for Mark's sister; a long-term care insurance review; and advice on how to invest a lump sum that must remain liquid.

Thanks to everyone who participated and to Mark, the BEST producer in the world. Check out Mark's first-producing credit for this CBS Evening News segment that aired recently. If you have a financial question, there are lots of ways to contact us:

  • Call 855-411-JILL and we'll schedule time to get you on the show LIVE