The comment deadline closed yesterday on the Department of Labor’s proposed fiduciary rule, which is intended to protect workers and retirees against conflicted investment advice. 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.
In a comment letter, Americans for Financial Reform urged the Department to follow through on its commitment to close this regulatory loophole. “In our view, these proposals represent a critical and long overdue improvement of investor protections mandated by the Employee Retirement and Income Security Act (ERISA),” the AFR letter stated. “We support these reforms, with the proviso that the protections currently in the rule against possible abuses of exemptions and exclusions must be maintained in full.”
Last week, AFR, CREDO Action, MoveOn,org, and Public Citizen delivered petitions in which more than 230,000 Americans called for a strong fiduciary-duty standard for retirement investment advice across the board.
The full text of AFR’s comment letter follows: