Written by Matt Bell (WiseBread.com)

If you have money invested in a retirement plan, such as a 401K or an IRA, chances are high you’ll be impacted by an executive order issued recently by President Trump. It centers on the “fiduciary rule” and, whether the rule goes into effect or not, you would be wise to understand what all the fuss is about and how it could affect you.

It centers on the “fiduciary rule,” one of former President Obama’s initiatives that was scheduled to go into effect on April 10th. President Trump put the brakes on it by ordering the Labor Department to study the issue further. Whether the rule goes into effect or not, you would be wise to understand what all the fuss is about and how it could affect you.

Fiduci…What?

Financial professionals, such as financial planners, insurance agents, brokers, and others, are legally bound to adhere to certain standards of conduct, the highest of which is a fiduciary standard. Anyone working under that standard, which today includes Certified Financial Planners and Registered Investment Advisers, is required to act in their clients’ best interests, detail all commissions and fees, and disclose any potential conflicts of interest.

Others, including many brokers and life insurance agents, are held only to a suitability standard. That means if two financial products could meet a client’s needs, but one would pay the financial adviser a higher commission, he or she could recommend that product to their client.

The Obama administration estimated that biased advice steering people to needlessly high-cost, high-commission financial products and services costs investors $17 billion per year in fees and lost investment income. Its fiduciary rule would require any financial professional recommending retirement-related financial products or services to adhere to a fiduciary standard.

What It Means for You

Here are some steps you can take to help make sure your retirement accounts are run in your best interest, rather than the managers’.