“In America, after a lifetime of hard work, you should be able to retire with dignity and a sense of security.” — President Obama
Because of a “Retirement Advice Loophole” dating back to the 1970s, Wall Street banks, brokers, mutual funds, and insurance agents with major conflicts of interest are allowed to provide investment advice that puts their own interests ahead of what’s best for their clients. Millions of Americans are affected by this loophole every year without even knowing it, and it is draining away their retirement savings. – From Save Our Retirement
President Obama is determined to close this loophole. At an AARP event attended by Better Markets, the President announced his strong support for an updated rule from the Department of Labor (DOL) that has been sent to the Office of Management and Budget (OMB) for review — a critical first step in the rulemaking process. This rule is expected to require everyone who provides retirement advice to act solely in the best interests of their clients, to be held to a fiduciary duty standard, like a doctor or a lawyer.
President Obama was joined by Senators Elizabeth Warren and Corey Booker as well as Congressman John Delaney who all showed strong support for this rule.
Key Articles To Help Understand Why We Need This Rule
Save Our Retirement: The Problem
The White House: What You Need to Know about Retirement “Conflicts of Interest,” in Three Big Sentences
Huffington Post: Obama: Stop Wall Street Brokers From Putting Their Interests Above Clients Saving for Retirement
Myth/Fact Sheet: Don’t Believe the False Spin on Labor Department’s Effort to Protect Americans’ Retirement Security
Better Markets Blog: Retirement Investment Advice Should Come Without Conflicts of Interests
From the White House:
President Obama Announces Support For A Fiduciary Duty Rule
President Obama’s Weekly Address: Ensuring Hardworking Americans Retire with Dignity
SEC Chair White Agrees That SEC and DOL Have Separate Mandates and Missions On Fiduciary Duty
Securities and Exchange Commission (SEC) Chair Mary Jo White recognizing the separate and important mission of the DOL to protect retirement investors under ERISA, and explaining that the DOL and the SEC staffs have consulted extensively on the DOL’s rule.
Important Articles
ThinkAdvisor: DOL Extends Fiduciary Comment Period by 15 Days May. 15
Associated Press: Small investors blame losses on brokers they once trusted Mar. 30 by Bernard Condon
New York Times: Americans Aren’t Saving Enough for Retirement, but One Change Could Help Mar. 3 By Eduardo Porter
The Detroit News: Stop fees from putting ‘broke’ in ‘broker’ Mar. 2 By Brian J. O’Connor
The Philadelphia Inquirer: Seeing Through the Fog on Retirement-Fund Advisers Mar. 1 By Jeff Gelles
New York Times: Protecting Fragile Retirement Nest Eggs Feb. 28 By The Editorial Board
The Project Syndicate: Obama Steps Up Feb. 25 By Simon Johnson
New York Times: Obama Proposal Recognizes How Retirement Saving Has Changed Feb. 24 By Neil Irwin
Bloomberg: Fiscal Hawks Should Love Cheaper Retirement Plans Feb. 24 By Barry Ritholtz
Forbes: Obama Attacks Advisors Selling Snake Oil, Lauds New DOL Fiduciary Rule Feb 23. By Ashlea Ebeling
Reports and Studies
White House Report: The Effects of Conflicted Investment Advice on Retirement Savings
GAO Rollover Report and audio recordings (detailing the findings of a 2013 GAO investigation into the tactics firms use to influence investors’ decisions about rolling over their retirement assets)
A Legal Analysis: Understanding DOL’s and the SEC’s Respective Roles
AARP Survey: Workers Want Advice That’s In Their Best Interest
Better Markets Press Statements
Save Our Retirement Coalition Statement Following Review of Rule Protecting Americans’ Retirement Savings April 16, 2015
Better Markets Statement on Sec Chair White’s Comments on the Clients’ Best Interests Fiduciary Standard March 18, 2015
Save our Retirement Statement Ahead of Senate Aging Committee Hearing on Retirement Security March 12, 2015
Better Markets Statement on Legislation to Prevent the Release of DOL’s Rule Protecting Americans’ Retirement Savings Feb 26, 2015
President Obama’s Actions to Protect Americans Feb 23, 2015
Major Groups Applaud President’s Call for Movement on Pro-Consumer Rule to Protect Americans’ Retirement Savings Feb 23, 2015
Public Interest Organizations Join Forces to Protect Americans’ Retirement Savings Jan 15, 2015
