Investing became fairer recently when the Department of Labor announced that it would require financial professionals handling tax-advantaged retirement accounts to act in the best interest of their clients. Starting next spring, advisers will have to act as fiduciaries and put their clients' financial interests before their own.
The Department of Labor's "conflict of interest rule" is a step in the right direction, and a victory for millions of retirees, present and future. The Obama administration has estimated that conflicts of interest that arise when investment professionals do business -- for example, advising a client to invest in a mutual fund that gives a heftier commission than a different option -- costs Americans about $17 billion a year.
Since most savers do not have the savvy of a professional investor, it is essential that their advisers have to provide as unbiased counsel as possible.
Today, the notion of retirement borders on sacred. In the United States, total retirement assets totaled over $24 trillion as of 2015. People hope that their golden years will pass in relative ease and comfort. The decision from the Department of Labor increases their odds of achieving this.
But there's still a huge gap. As Social Security seems smaller and less certain and as traditional pension plans become less common, people are increasingly having to build assets for their own futures.
The uncertainty is not surprising, as funded retirement is still new and fragile. For thousands of years, people worked until they died or until their family provided financial support.