Why the Fiduciary Standard Can’t Wait: Goldman Sachs Group, Inc. (GS)

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Moreover, during tough economic times in the industry, when movements of brokers from firm to firm get more common, clients can face unexpected financial devastation from following their brokers. Many companies charge exit fees for transferring accounts to other brokerage firms, and with some proprietary funds not eligible for transfer to outside firms, the need to sell off existing assets and buy new ones — at a brand-new commission — can be extremely costly.

Overall, stories such as former Goldman Sachs Group, Inc. (NYSE:GS) employee Greg Smith’s book criticizing the company only accentuate the feeling that clients have that they’re only revenue sources for their advisors. Several discount brokerage companies, including E TRADE Financial Corporation (NASDAQ:ETFC), Charles Schwab Corp (NYSE:SCHW), and TD Ameritrade Holding Corp. (NYSE:AMTD), have sought to expand investment advisory options to take advantage of that bad view of Wall Street brokers, but it remains to be seen whether they’ll avoid making the same mistakes in letting self-interest win out over clients’ best interests.

Don’t wait any longer
Regulators need to work faster to get a universal fiduciary standard in place to protect unknowing clients from their conflict-ridden investment professionals. The cost of waiting is simply too high.

Fortunately, you don’t have to wait for a universal fiduciary standard. By demanding an investment professional who voluntarily adopts such a standard, you won’t get guaranteed winning results, but it should make you feel more comfortable about the advice you get from the person you’re depending on to help you reach your financial goals.

Tune in every Monday and Wednesday for Dan’s columns on retirement, investing, and personal finance. You can follow him on Twitter: @DanCaplinger.

The article Why the Fiduciary Standard Can’t Wait originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger owns warrants on Bank of America. The Motley Fool recommends Goldman Sachs and TD AMERITRADE and owns shares of Bank of America.

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