THIS IS WHY WE REGULATE WALL STREET

Let's assume you have a retirement account. Should your financial adviser make investment decisions based on what's best for your financial future, or do what's best for the fee-based bottom line of Wall Street? Put another way, should financial advisers be obligated to keep your retirement accounts in low management fee accounts that generate returns that are best for you, or should they be free to steer you into higher fee accounts (like IRAs) that benefit them?

This is exactly the question discussed in "The Fight Over Protecting Your Retirement Savings." Incredibly, we learn that Wall Street is doing its level best to fight proposed Labor Department rules that would obligate the financial community to put your financial interests first.

How much could this impact your retirement? Plenty. Check it out.

Let's say that you're a young adult and shift jobs. You take your $25,000 401(k) retirement fund with you to your next job and add nothing else to the account. With projected yearly returns of 7%, and a 0.5% management fee, you should expect to have $227,000 by the time you retire in 35 years.

However, if a Wall Street adviser can convince you, or your financial manager, to stick your $25,000 into an IRA account that charges 1.5% in management fees things change drastically. Specifically, you will end up with $163,000 when you retire, which represents a 28% drop in your retirement account. Currently there is no penalty if the people managing your account do this.

The people on Wall Street want to keep it that way.

Most people would say that deliberately shifting you into a higher fee account that benefits your financial adviser(s) is just not right. Not so with Wall Street.

Wall Street lobbyists are effectively arguing that it's not their industry's responsibility to watch out for your best financial interests.

You can read the story here.

- Mark

If you're interested, here's the link to a three-part story I did a few years back on "The Stock Market vs. Social Security." Long story short? You're not always better off with your money in the market, especially with all the orchestrated bailouts Wall Street has needed since the 1980s.