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Safeguarding Your Retirement Savings: Why Working with a Fiduciary Matters

Safeguarding Your Retirement Savings: Why Working with a Fiduciary Matters

February 01, 2024

The Biden administration is cracking down on so-called “junk fees” in retirement accounts.  

The U.S. Department of Labor introduced a new rule to protect people's retirement savings from something called "junk fees." These fees can seriously impact your savings, so it's important to understand what's happening and why working with a fiduciary can make a big difference.

Understanding the New Rule

The U.S. Department of Labor has proposed a rule to stop financial advisors and brokers from giving advice that might not be in your best interest. Sometimes, advisors recommend investments that pay them more money but may not be the best for your retirement savings. This new rule aims to close these "loopholes" and protect your money.

Here are the three main areas this rule focuses on:

  1. Rollovers from 401(k) plans to IRAs: It ensures that recommendations to move your retirement savings are made with your best interests in mind, not the advisor's profit.
  2. "Non-securities" products like indexed annuities: These products aren't well-regulated and can be influenced by advisors looking to make money. The rule aims to protect you when investing in such products.
  3. Recommendations to employers about 401(k) plan investments: Advisors need to recommend investments that are best for employees, not what benefits them personally.

The Importance of Fee Transparency

"Junk fees" can eat into your retirement savings without you even realizing it. These hidden costs can reduce your savings by as much as 20%, which could mean losing tens or even hundreds of thousands of dollars over time. Knowing and understanding the fees you're paying is crucial to keeping your retirement savings on track.

Working with Fiduciaries

The new rule introduces something called a "fiduciary" standard for financial advisors. Fiduciaries are the good guys—they have to put your interests first and not think about their own profits. This legal standard offers powerful protection for your retirement savings.

When you work with a fiduciary, you can be confident that your advisor is on your side. They will recommend investments that are best for you, not for them. This is important for making sure your hard-earned money is working for your future.

In Conclusion

To safeguard your retirement savings, it's essential to work with fiduciaries who are legally bound to act in your best interest. This not only ensures that your investments align with your financial objectives but also provides you with the peace of mind that your financial future is in capable hands.

Protecting your retirement savings from "junk fees" is a big deal, and understanding the fees you're paying is key. At Deschutes we take our duty as fiduciaries very seriously and make it a priority to be transparent and provide the best service possible to our clients. If you would like a review of your individual portfolio or your business retirement plan we are happy to take a look and explain any hidden fees or issues to you. Please contact to get your complimentary consultation.