Corporations suing to stop improved fiduciary standard
The U.S. Chamber of Commerce and the Securities Industry and Financial Markets Association are suing to block hard-won new rules that require asset managers to put the interests of their clients ahead of their own profits.
Earlier this year, ProtectSeniors.Org joined many others in petitioning the federal Department of Labor to adopt the new rule, aimed at preventing conflicts of interest that could harm retirees and erode their savings. The new rule ensures that investment managers put their clients’ interests ahead of their own ability to generate extra fees and commissions on investments.
Did you know that prior to this rule, advisers only had to provide “suitable” advice and could lead investors to retirement plans that lavished lucrative fees on themselves but did not serve the interests of the asset holder?
ProtectSeniors.Org believes that fiduciaries should be held to the highest standard of trust, which is why we supported this important rule change. Retirement investors need these protections, which is why ProtectSeniors.Org wrote to U.S. Labor Secretary Thomas Perez advocating for the change. The new regulations are slated to go into effect in April 2017.
According to the Wall Street Journal, the lawsuit to block this effort would focus on a provision that allows retirement investors to sue their advisers if they believe the adviser did not act in their best interests.
Both the U.S. Senate and the House have also passed bills to kill the new consumer-friendly rule, which President Barack Obama vowed to veto.
ProtectSeniors.Org President Jim Casey said, “The fiduciary rule was designed to protect retirees from financial advisers looking to pocket excessive commissions and fees on our backs. We think it is outrageous that Wall Street investment firms are teaming up with large corporations to try to get this commons sense, consumer-friendly rule thrown out.”