$17 Billion a Year at Stake for U.S. Retirement Savers and Investors if House of Representatives Overrides President’s Veto Wednesday
Millions of U.S. retirement savers and investors could suffer an estimated $17 billion in higher fees and lower returns on their nest eggs each year if the U.S. House of Representatives votes Wednesday to override President Obama’s veto of H.J. Resolution 88, which would nullify the Department of Labor (DOL) rule requiring financial professionals to act in the best interests of their clients saving for retirement. (A full veto would require a similar override vote by the U.S. Senate.)
The common-sense “fiduciary rule” protecting retirement savers and investors has attracted broad support from AARP, AFL-CIO, the American Federation of State, County and Municipal Employees (AFSCME), the Pension Rights Center, Americans for Financial Reform, Better Markets, the Consumer Federation of America, and many others.
The key provisions of the DOL rule are as follows:
- Investment advisers must provide advice that is impartial and in the best interest of their customers;
- Advisers may receive common forms of compensation, such as commissions, provided they comply with the rules;
- Firms must acknowledge the firm and their individual adviser’s status as fiduciaries;
- Firms must make prudent investment recommendations without regard to their own interests, charge no more than reasonable compensation, and make no misrepresentations about their recommendations.
- General financial, investment and retirement education is permitted, including newsletters, research reports and marketing materials.
- Consumers must be provided key adviser information at the time of a purchase and other important information must be maintained on the firm’s website or be available upon request.
You can learn more about no-conflict rule here:
- Compilation of editorials, columns: http://saveourretirement.com/2016/04/editorialcolumnistnews-roundup-why-congress-should-protect-our-retirement-savings/
- Consumer Federation of American – 6 ways rule benefits retirement savers: http://consumerfed.org/wp-content/uploads/2016/04/6-Ways-the-DOL-Fiduciary-Rule-Protects-Retirement-Savers.pdf
- Obama veto message: https://www.whitehouse.gov/the-press-office/2016/06/08/veto-message-president-hj-res-88.
Why is this House veto issue a “front burner” issue for average Americans? Small account holders and moderate-income retirement savers stand to benefit most from the DOL rule. Less wealthy, often financially unsophisticated retirement savers are most at risk when it comes to investment recommendations that are not in their best interests. Often, those recommendations promote investment products with high costs, substandard features, elevated risks or poor returns. While the financial adviser may make a substantial profit off these recommendations, the retirement saver pays a heavy price for investment advice that is not in his or her best interest, amounting to tens or even hundreds of thousands of dollars in lost retirement income.
A broad range of experts are available with you to discuss the House veto override with you before, during and after the point in time when it happens.