I have written before about the benefits of working with a fiduciary investment advisor in order to improve the investment decisions you make in your Minnesota company 401(k) retirement plan account.
Here is a link to one of my previous blog posts on this same topic.
I continue to meet with individual company retirement plan participants who are confused about a fiduciary investment advice relationship. In honor of the current Olympics in London, I want to revisit the topic again today.
A fiduciary investment advisor discloses, in writing, that the financial interests of the client come first. The client of a fiduciary investment advisor is the individual company retirement plan participant.
Any investment advice provided by a fiduciary investment advisor does not best serve the advisor, or the firm the investment advisor works for. The investment advice provided serves the best interest of the client first and foremost.
A fiduciary investment advisor provides an individual company retirement plan participant with independent, third-party investment advice on the menu of mutual fund options in a company retirement plan account.
This fiduciary investment advice relationship also contains the full disclosure that the fiduciary advisor does not have any conflicts of interest in the investment advice provided. This disclosure states that the fiduciary investment advice provider does not get paid to sell a product to the individual company retirement plan participant.
The only thing service that a fiduciary investment advisor provides to the individual company retirement plan participant is investment advice. The failure or success of that investment advice is judged by the rise or fall of the individual investor’s company retirement plan account.
The gold medal standard of any investment advice relationship is when a fiduciary investment advisor does not sell financial products to an individual investor. In that relationship, the fiduciary investment advisor sits on the same side of the table as an individual investor.
Just like the athletes in London, you should strive for the gold medal standard of a 401(k) investment advice relationship.
Ric Lager
Lager & Company, Inc.
