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MEDIA ADVISORY FOR IMMEDIATE RELEASE

June 4, 2019

Teleconference with SEC Commissioner Robert Jackson

Advocates see investors worse off than before SEC acted on broker standards

NOTE: AARP to join conference call for reporters at 1pm

CONTACT: Carter Dougherty, carter@ourfinancialsecurity.org

Following the SEC meeting, Americans for Financial Reform will host a conference call with guest SEC Commissioner Robert Jackson. AFR and other groups have criticized the commission’s plan on investment advice for leaving ordinary Americans vulnerable to harmful industry practices. The call will include the AFL-CIO, AARP, and the Consumer Federation of America.

WHAT: Teleconference with guest SEC Commissioner Robert Jackson, and outside groups

WHEN: 1pm ET, Wednesday, June 5

WHERE: Dial (800) 230-1092 and request “SEC Investor Protection Call”

Please RSVP to max@ourfinancialsecurity.org

After issuing a bad proposal that creates standards brokers and investment advisers must follow in serving their clients, the SEC has failed to remedy its many shortcomings. To the contrary, all signs point toward a regulation that will leave investors worse off than they would have been had the SEC failed to act at all.

Background:

• The problem is real. Americans lose tens of billions of dollars each year to the self-interested advice of brokers around the country. Some brokers push investments that are lucrative for them, but not so good for investors, and the new rule will not change that.
• Investor advocates made their case to Clayton but he has shown no sign of changing the proposal to address their concerns
• The SEC is calling its new standard for brokers “Regulation Best Interest” but that’s a label, not a standard that will make a meaningful difference for investors.
• In some areas, the SEC’s plan offers less protection than investors currently enjoy under state common law fiduciary standards.
• Rather than strengthening the standard brokers have to adhere to, the SEC is allowing the status quo to continue for brokers and watering down the standard that investment advisers are held to.
• The SEC’s failure makes it more important than ever for states to step in and provide the strong protections that investors need.

Statements from AFR, AFL-CIO, AARP, and CFA

“Working people invest trillions of dollars of their hard-earned savings to provide for retirement or their children’s education,” said Heather Slavkin Corzo, senior fellow at Americans for Financial Reform, and director of capital markets policy at the AFL-CIO. “They need the SEC to protect them from abuse when making these investments, but the SEC shows no sign it is willing to do so. Without a strong regulation that imposes tough standards on brokers and investment advisers, the SEC is betraying working people and its mission to protect investors.”

“Over the last year, AARP members have repeatedly called on the SEC to develop a rule that puts their financial interests first and shields them from conflicts of interest, hidden fees, and other losses that result when financial professionals put their own interests first,” said Lee Baker, AARP Georgia State President. “Despite AARP members’ clear calls to protect their financial security, the SEC appears to have missed this opportunity to strengthen investor protections and improve the quality of advice upon which investors rely.”

“For years, the SEC has allowed brokers to mislead investors into relying on them as trusted advisers,” said Barbara Roper, director of investor protection at the Consumer Federation of America. “This regulatory package enshrines that deceptive practice as official SEC policy. It is a fraud on the investing public.”

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