Interests of Financial Professionals Often Conflict With Retirement Investors, Watchdog Says

Investment advisers are prioritizing their business profits over the interests of their retirement clients, according to a recent report by the U.S. Government Accountability Office (GAO). “The interests of financial professionals and firms often conflict with the interests of retirement investors. This could create risks for millions of investors with over $18 trillion dollars in retirement savings in 401(k) plans and IRAs,” said the report released on Aug. 28. For instance, financial professionals may favor business gains over their investors and recommend products that do not necessarily improve returns on retirement savings. GAO found compensation schemes for financial advisers that conflicted with client interests such as promoting their company’s proprietary products instead of market alternatives. In some instances, advisers were encouraging clients to switch retirement accounts for personal profits....