Better Markets has filed a comment letter urging the Department of Labor to withdraw a recently proposed rule that would allow financial advisers to continue siphoning away hard-earned savings from Americans’ retirement accounts.
The proposed DOL rule would allow financial advisers to continue accepting forms of compensation that create powerful conflicts of interest without imposing adequate safeguards. As a result, many financial advisers will continue to foist overpriced and underperforming assets on their unsuspecting clients who trust them to properly guide their retirement portfolios. A report by the Council of Economic Advisors found that such conflicted advice costs retirement savers $17 billion a year, and that estimate captures only a small fraction of the annual losses.
Steve Hall, Legal Director and Securities Specialist for Better Markets, said the rule would protect the profits of the financial services industry instead of protecting retires and others saving for retirement.
“The new rule is a terrible abdication of responsibility by the DOL, which is supposed to look after the best interests of the tens of millions of Americans who are struggling to save some of their hard-earned money for a decent retirement,” Hall says. “While the DOL claims its new proposal is a “best interest” or fiduciary duty rule, it’s nothing of the sort. It restores huge loopholes in the protections intended for retirement savers, and for any investment advice that’s still covered, it adopts weak conditions that will allow harmful conflicts of interest to continue flourishing.”
Hall adds that the new rule is a “slap in the face to millions of Americans who count on their regulators to protect them from abuses at the hands of banks, brokers and financial advisers. Worse, it will degrade the quality of life that Americans can expect in retirement.”
He says the DOL should immediately rescind the illegal and poorly written proposal, remember its duty to American retirees and put forth a new rule that provides real protections for Americans’ hard-earned savings.