Most retired investors trust and rely on a financial professional to manage their retirement assets. Many people do not know that, because of this trust relationship, financial professionals owe their customers a fiduciary duty to act in their best interest and to recommend investments that are appropriate for their investment needs. If financial professionals breach their fiduciary obligations by giving inappropriate financial advice, they and their firm may be held liable to their customers for the damages caused by the bad advice.
In recent years, many telephone company retirees have elected to take the lump sum payout option over the traditional pension. Many retirees elected the lump sum option based on the advice of trusted financial professionals who recommended the lump sum because it purportedly would provide the retiree with higher monthly retirement income and the opportunity to grow the investment with little or no risk. In truth, in many cases, the financial professional improperly recommended the lump sum option solely because it was the only way that his or her firm could gain control of the retirement assets and generate commissions.