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Probably the hottest issue in the financial advice business these days is a new regulation affecting retirement accounts that goes into effect in April – barring any delay or change from the incoming Congress or Administration, whose arrival is likely to affect other areas of investing too.

Put in place by the Department of Labor, the rule will require that any advisor who provides advice to 401(k) plans and Individual Retirement Accounts (IRAs) be held to a fiduciary standard.

Putting the Investor First

The essence of acting as a fiduciary is putting the client’s interest before your own. For example, if a financial advisor could recommend two virtually identical mutual funds that differed only in that one paid him a commission and the other was commission-free, a fiduciary advisor would have to recommend the choice that was less expensive for the client – even if it was in his own interest to recommend the one that made him more money.

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