Many families use financial advisers and investment brokers to help manage, invest, and protect wealth. In doing so, families often trust the financial professionals to act in their best interest. However, the fiduciary duties of all financial professionals are not the same. In fact, broker dealers have been actively fighting rules to require them to put their clients’ best interests first. Thus, when investing through a financial professional, it is important to understand potential investment broker conflicts and avoid inheritance investment traps.
More specifically, it is important to understand that financial advice with undisclosed conflicts of interest takes an estimated $17 billion a year from retirement savings accounts. These undisclosed conflicts are an inheritance investment trap that steals wealth from many families.
Conflicts of Interest and Fiduciary Duties
Texas and federal law place fiduciary duties on some financial professionals who are trusted with other people’s wealth. Many of these duties require professionals to act in their client’s best interest and to disclose conflicts of interest. These laws protect consumers from financial professionals who use their client’s wealth for their own benefit. However, despite efforts to unify these laws, lobbyists against consumer rights prevent these laws from passing.
Protect Your Wealth and Family from Inheritance Investment Traps By Asking Questions and Keeping Copies of All Investments
When investing your wealth through a financial professional, make sure you understand what duties apply. Though it is not always easy, ask direct questions and if possible verify in writing. Further, keep copies of all contracts, representations, and statements.
Recovering Lost Wealth From Inheritance Investment Traps and Breaches of Fiduciary Duties
If your family has lost significant wealth held by a financial professional, it is important to gather all records of the investment. More specifically, gather all sign up information, all communications, and all account statements. It is also helpful to have access to all electronic files. These documents allow a thorough review of all transactions.