Wow! This Percentage of Americans Want 401k Advisors to be Fiduciaries

Key phrase is 'legally required'

401k, fiduciary, retirementAlmost all agree with the intent of the fiduciary rule.

While the fate of the Department of Labor’s fiduciary rule grows increasingly uncertain and more complex, workers want it (or at least its intent)—badly.

A new survey from Financial Engines, the mega RIA robo provider founded by Nobel laureate Bill Sharpe, finds a whopping 93 percent of Americans think financial advisors who provide retirement advice should be legally required to put their clients’ best interest first.

However, more than half of respondents (53 percent) mistakenly believe that all financial advisors are already legally required to put the best interests of their clients first.

Compared to a similar survey last year, Americans have a slightly better understanding of the difference between a financial advisor who is a ‘fiduciary’ and one who is not (21 percent understand the difference today, compared to 18 percent a year ago).

However, many Americans still don’t know how to tell if an advisor is a fiduciary. Only 50 percent of investors who work with a financial advisor are certain that their advisor is a fiduciary, while 38 percent don’t know if their advisor is a fiduciary or not.

“The bar is rising,” Christopher Jones, chief investment officer at Financial Engines, said in a statement. “Once people understand the benefits of working with a fiduciary, they want one on their side. Consumers want to know that they can trust their financial advisors.”

According to the survey, if investors discovered their financial advisor was not a fiduciary, many would take action.

Respondents said that they would ask more questions about their advisor’s investment recommendations (47 percent), switch to another advisor (23 percent) or stop working with a financial advisor altogether (18 percent).

Only 12 percent would continue working with the same advisor in the same capacity. Sixty percent are receptive to having outside help to determine which financial advisors would put their best interest first.

“Many financial firms and advisors parse their words carefully to give the appearance of being a fiduciary, even when they are not,” Jones added. “While the debate over the conflict of interest rule has raised consumer awareness about this important standard, investors must still be careful to demand advisors that act in the sole best interests of their clients.”

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