“Earlier this year the Obama administration proposed a “conflict of interest” rule, designed to ensure that when it comes to saving for retirement, financial advisers always put their clients’ interests above their own — instead of, say, nudging their clients into investment products that pay the advisers more for their recommendation, but offer less return for the investors.
“The administration’s proposal, to be implemented through the Department of Labor, says that advisers who receive side payments like this have to disclose them to clients, and also commit to an enforceable “fiduciary” standard — meaning they have to put their customers’ best interest before their own profits.
“Not surprisingly, some financial services companies don’t like this idea, and have been spending millions of dollars lobbying to block the rule. On Wednesday the House Financial Services Committee is scheduled to vote on a bill that would effectively prevent the administration from moving forward with the proposal until the Securities and Exchange Commission issues its own rule on financial advice.”
Read the full New York Times article by LIly Batchelder and Jared Bernstein here.