ProtectSeniors.Org has joined the fight for tightening the rules on financial advisers who serve as fiduciaries for our retirement assets. The organization addressed the U.S. Department of Labor (DOL), on a new proposal to require expanded requirements that would finally require investment managers to put the best interests of their clients ahead of their own profits.
“ProtectSeniors.Org supports the measure because we believe that there must be clear and stringent regulations over investment fiduciaries,” ProtectSeniors.Org President Jim Casey and Board Chairman Bill Jones told the DOL. “The Department of Labor has a historic opportunity to do right by millions of older Americans who have labored over many decades, saving for retirement and who are entitled to fair and transparent rules regarding how their money is managed.”
The White House Council of Economic Advisers determined that conflicts of interest among investment advisers directly leads to about 1 percentage point in annual losses for retirement savers, costing Americans about $17 billion per year. The Council also calculates that adding this up means an individual could lose an astonishing 25 percent of his or her savings over the course of 35 years.
Financial managers with control over retirement savings are often paid hidden fees and extra commissions to steer clients’ money into certain investment vehicles. Currently, they operate under varying rules and disclosure requirements. In many instances, investment managers are not required to tell clients they are also being paid to steer money to certain investments.
As the DOL considers tougher rules for fiduciaries, the ProtectSeniors.Org team is also actively working in Congress to pass legislation that would limit companies’ ability to cut or eliminate earned benefits for retirees. That bipartisan legislation, the Employee Benefits Protection Act, H.R. 1856, has been introduced by U.S. Rep. Louise Slaughter (NY-25).
“Retirees across this nation are at risk,” Jones and Casey wrote. “Current rules do not do enough to ensure that financial advisers’ interests align with those whose assets they are managing. It is time to crack down on these hidden, deceptive practices and give retirees the protections they deserve.”