WASHINGTON, D.C.—Stephen Hall, Legal Director and Securities Specialist, issued the following statement on the release today of rules from the Department of Labor (DOL) that will protect American workers and retirees from adviser conflicts of interest:
“These reforms will improve the lives of millions of Americans struggling to save and invest for a financially secure and dignified retirement. The final rules will require all financial advisers to act in the best interest of their clients when they give advice about retirement investments. They are designed to impose minimal compliance costs while closing huge, 50-year-old loopholes in current rules and strengthening the steps advisers must take to ensure their conflicts of interest don’t contaminate their advice. It’s fundamentally fair, it’s what Congress always intended, and it’s what every American thinks they’re already receiving from their financial advisers.
“But the reality is that too many financial advisers are allowed to recommend investments that increase their own income handsomely but saddle their clients with financial products that cost too much, perform poorly, lock up savings, or carry excessive risks. As a result, after a lifetime of hard work, many Americans discover that bad investment advice has forced them to delay retirement for years, suffer a lower standard of living, or even go without basic necessities. Think of it this way: Most Americans would be horrified if their doctors were allowed to prescribe ineffective or even harmful medications because they could earn fat fees or commissions from pharmaceutical companies. Yet that’s essentially what goes on in the world of financial advice for workers and retirees.
“These reforms represent a huge step forward in fixing the problem. The rules will cover advice about all kinds of investments, from securities to insurance products and precious metals. They’ll also cover advice regardless of whether it’s about a one-time rollover of an entire life savings from a 401(k) to an IRA, or a series of recommendations over time. The ferocious opposition from some in the industry is based not on the facts and the law but on their relentless effort to protect profits. To the extent advisers claim they can’t afford to stay in business under the rules without taking unfair advantage of their clients, we say all the better. Other advisers willing to put clients first will take their place, and all retirement savers—especially the small account holders who can least afford bad retirement advice—will be better off.”
For more information, read our fact sheet here.
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Better Markets is a non-profit, non-partisan, and independent organization founded 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.org.
