The SEC’s proposed “Regulation Best Interest” is anything but, a plan for creating a veneer of investor protection that would fail to chase bad practices out of the industry that cost savers $40 billion per year. Many savers fall victim to brokers who steer them into investments that pay lucrative fees but don’t generate the best possible return for investors.
When it comes to the economy, unfortunately the President hasn’t drained the swamp. Instead, he is filling the government with Wall Street insiders who are now attacking rules put in place to keep big Wall Street banks and predatory lenders from ripping off consumers and prevent another disastrous financial crisis.
“Twenty-five top U.S. brokerage firms and insurance companies present their employees as trusted financial advisors putting client interests first even as their lobbyists argue in court that they are nothing more than commission-driven salespeople, according to a major new report from the Consumer Federation of America (CFA) and Americans for Financial Reform (AFR). The report also dissects how brokerage firms and insurance companies are systematically misleading unwary consumers.”
The Senate will vote today on a resolution to disapprove the Department of Labor’s rule requiring retirement advisers to put their clients’ best interests first. The principal sponsors of the Senate resolution – Johnny Isakson of Georgia, Lamar Alexander of Tennessee and Mike Enzi of Wyoming
“We urge you to reject any such proposal that weakens or delays these crucial protections, whether it is based on H.R. 1090 or a phony Wall Street ‘alternative’ to DOL rules. Instead, you should stand with your hard-working constituents saving for retirement who deserve financial advice that is in their best interest, no matter who provides it.”
“Over the forty years since the existing DOL rule was written, retirement markets have transformed and workers have become overwhelmingly reliant on self-directed savings. Due to the loopholes in the current rule, brokers providing advice on such self-directed savings can easily evade the fiduciary protections that Congress intended to provide to workers saving for their retirement through employment-based plans.”
“This is a huge problem – one that, over time, can easily add up to a difference of tens or even hundreds of thousands of dollars in retirement savings. Under the current rules, some of the financial professionals offering retirement investment advice are legally bound to look out for the best interests of their clients; but other professionals, while perceived as having such a duty and clearly benefiting from the perception, are free to put their own interests first, even if that means saddling their clients with needlessly high fees or inappropriate risks.”
With the rulemaking process moving into its final stages, the Department of Labor received a delivery today of petitions in which more than 230,000 signers call for action to protect Americans against self-serving retirement advice. The signatures were gathered by CREDO Action, MoveOn.org, Americans for Financial Reform, and Public Citizen. Ethel Sprouse, the former Mayor of Cedar Bluff, Alabama, accompanied the petition deliverers and told her story at the event.
Consumer Financial Protection Bureau Director Richard Cordray accepted delivery today of a set of birthday-card-style petitions in which more than 13,500 Americans express their support and gratitude for the Bureau’s efforts “to safeguard American consumers, families and communities against the deceptive and abusive practices of
With a public review process just getting underway, CREDO Action, MoveOn.org, AFR and Public Citizen have submitted petitions in which more than 225,000 people tell lawmakers and regulators to uphold the promise of strong action to protect Americans against self-serving retirement advice.