“What is fiduciary responsibility and why is it so important!”

By Mark Folgmann

A Fiduciary is someone who occupies a position of special trust and confidence. The sponsor of your 401k holds this position and their sole purpose is to protect and secure your families retirement income. This responsibility involves many parts such as selecting advisors, cost analysis, evaluating conflicts of interest, implementing a fiduciary process and ensuring a successful retirement outcome. Unfortunately many fiduciaries are not fulfilling their duty and are incorrectly assuming their advisors are sitting on the same side of the table and sharing the risk.

You must start by asking your advisors if they accept fiduciary responsibility, in my opinion this is the most important question you will ever ask your advisor. Most firms and advisors operate under the suitability standard and that does a great job protecting the advisor and his firm but does not protect you the client. Fiduciary advisors must act in their client’s best interest so make sure you get confirmation in writing. You can learn more by visiting www.focusonfiduciary.com. Employees depend on their plan fiduciaries to be knowledgeable and implement a process that will protect their family’s retirement income. Based on the current status of our 401k plans we need a wake-up call to plan sponsors. Remember the interest of the financial service industry is diametrically opposed to the American worker whose retirement funds they have been entrusted to invest. Every dollar of cost reduces your retirement account by an equal dollar. Plan sponsors can learn more by registering for our February 25th NMC class from 1-4pm “Understanding your 401k” at 995-1700.

Next time: What the financial service industry does not want you to know (conflict of interest)