Consumer Reports and Michael Finney: Advice on retirement plans

SAN FRANCISCO (KGO) -- Need advising on your retirement? 7 On Your Side's Michael Finney partnered up with Consumer Reports, and found when it comes to retirement savings, you might assume that the person giving you investment advice is acting in your best interest, but that's not always the case.

A plan that will require them to do so was initially delayed but is now scheduled to go into effect in early June. So how will this affect your nest egg?

It's called the fiduciary. A complicated name for what's a pretty basic idea: when making investment recommendations, the person advising you on your retirement portfolio should make your bottom line their top priority.

"It's basically setting a higher standard. Commission-based advisers are only required to choose investments that are 'suitable' for investments. They may be appropriate, but they could cost you a lot more in commissions and fees than if you had hired a fiduciary," explained Tobie Stanger, Consumer Reports money editor.

It's estimated $17 billion dollars is paid to fees and commissions each year. The new rule also cracks down on hidden fees, and requires your advisor tell you about any special kickbacks they might receive steering your investments a certain way.

President Trump had ordered a review of the Obama-era rule, which was supposed to go into effect in April, but will now be effective as of early June.

"The reality is a lot of brokerages who expected this rule to go into effect already made changed from commission-based to fee-based fiduciary's but it's still worth asking, 'Are you a fiduciary?'" said Stanger.

If they can't make that promise in writing, find someone who can.

Also, be aware to make up for lost commissions, some brokers may tack on a 'management fee.'

"If the management fee is 1 percent or more of your assets, you probably can find a lower cost alternative," said Stanger.

And as always, it's your money and ultimately it's up to you to make sure you choose the best investments - and investment advisor - for your needs.

All Consumer Reports material Copyright 2017 Consumer Reports, Inc. ALL RIGHTS RESERVED. Consumer Reports is a not-for-profit organization which accepts no advertising. It has no commercial relationship with any advertiser or sponsor on this site. For more information visit consumer.org.