A new rule was passed by the Department of Labor that enforces stricter guidelines on financial advisors who help clients plan retirement accounts. Advisors have come under scrutiny for failing to adhere to their fiduciary duty to the owner of the retirement account.
Fiduciary duty entails that advisors act that as if they are the account owner, and not sacrifice the account’s best financial interests for their own gains. A fiduciary has both ethical and legal obligations to act in the best interest of the client when managing their assets. Many fiduciary relationships exist in the business world, including corporate board members and their shareholders. This new rule will not go into effect until 2018, but there are ways to tell if a party is breaking the law and placing you in debt.
How Can You Tell If There Is a Fiduciary Breach?
If you are involved in a situation where there is a fiduciary who is responsible for some of your assets, there are ways to tell if the fiduciary is not acting in your best interests in three steps.
- Duty: The duty the fiduciary has to their shareholders must be established. For example, corporations have the duty to act in the best interest of shareholders.
- Breach: Failing to disclose information to the client, misuse of assets, misuse of their power over the assets, or using the assets for their own gains at the expense of the client, would qualify as a breach.
- Damages: It must be proven that you suffered damages from the breach.
A fiduciary breach can be financially devastating and difficult to detect or prove. A Lewisville bankruptcy lawyer will have knowledge of whether or not you are the victim of a breach, and how to get you out of financial trouble.