“The conflicts-of-interest rule that the DOL finalized last year was far too weak to adequately protect Americans’ hard-earned retirement savings from advisers who continue to enrich themselves by dispensing bad investment advice to their clients. The good news is that under new leadership, the DOL has begun the process of shoring up the rule. For example, last month, it issued some helpful guidance to clarify and strengthen the rule. But much more needs to be done.

“That’s why we joined with dozens of other prominent public interest groups in crafting and submitting a letter to the DOL urging it to take three critical steps. First, it must issue more guidance that can immediately narrow loopholes in the rule, further strengthen the best interest standard, and make the disclosure obligations more meaningful. Second, it must engage in rulemaking to permanently close loopholes in the outdated rule defining who is an investment advice fiduciary. That’s key because that rule invites evasion, allowing an enormous amount of retirement investment advice—including some advice on critical rollovers between different types of retirement accounts—to fall completely outside the protections that Congress established in ERISA, the law governing retirement accounts.

“Finally, the DOL must revamp the rule itself so that it imposes a genuine duty on advisers to always act solely in the best interest of their clients. The amended rule must also require advisers to monitor client accounts over time, overhaul the substance and timing of the required disclosures, and eliminate the provisions that give violators a free pass under an indefensible “self-correction” clause.

“We’re optimistic because when the DOL issued its recent guidance, it clearly signaled its intention to engage in rulemaking to address these continuing risks to retirement savers. Only with a robust set of rule improvements, undertaken without delay, will retirement savers be adequately protected from the advisers who still siphon away their clients’ hard-earned savings.”

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business, and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements, and more. To learn more, visit www.bettermarkets.com.