WASHINGTON, D.C.—Stephen Hall, Legal Director and Securities Specialist, issued the following statement on the filing of Better Markets’ comment letter to the Department of Labor (DOL) in response to the proposed rules that will protect retirement savers from conflicts of interest among financial advisers.
“For decades, financial advisers have been allowed to push investment products, trading strategies, and account types that cost too much, pose excessive risks, and provide meager returns for retirement savers. The advisers increase their profits, win bonuses, or receive lavish non-cash rewards, while the retirement savings of millions of hardworking Americans are eaten away. These practices, driven by adviser conflicts of interest, cost tens of billions of dollars a year in lost retirement assets, and they degrade the quality of life that workers can maintain in their retirement years.
“This predatory practice has persisted due to huge loopholes in the rules governing those who give investment advice to retirement savers. To its credit, the DOL has proposed solutions. One rule will close the loopholes in the rule defining who is actually subject to the high standards of care and loyalty that Congress established in its 1974 law known as ‘ERISA.’ Another will strengthen the requirements applicable to all advisers to ensure that their conflicts of interest no longer deplete Americans’ hard-earned retirement assets.
“In our comment letter we review the enormous financial toll that adviser conflicts of interest take on retirement savers, and we refute the industry’s arguments in opposition. For example, neither the SEC’s rules nor the states’ insurance regulations can possibly substitute for these reforms. And contrary to some sky-is-falling industry predictions, retirement savers with small nest eggs will not lose access to advice once these important rules are in place.
“There is a retirement crisis in this country and financial advisers should not be able to make that crisis worse by enriching themselves with money that should benefit hardworking Americans. We commend the DOL for these proposals, which promise enormous benefits to the millions of Americans struggling to save for a decent and dignified retirement.”
Read our full comment letter here.
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.