For Immediate Release
U.S. PIRG Commends Department of Labor Rule on Conflicted Retirement Advice
Proposed rule closes loophole for investment professionals and requires advisers to put consumers first
WASHINGTON - U.S. PIRG commends action by the Department of Labor (DOL) to advance a major rule proposal to address loopholes in protections for Americans saving for retirement.
Today, most American workers save for their retirement through Individual Retirement Accounts or other defined contribution plans. In doing so, they are responsible for making investment decisions that will determine their financial well-being in retirement. Many Americans turn to financial investment professionals to better understand the complexity of their investment options and for advice on how to maximize their hard-earned savings. Unfortunately, loopholes in the current rules allow these investment professionals to make recommendations that are not in the best interests of their clients. Each year, hardworking Americans lose as much as $17 billion when they receive advice to purchase investments with high fees, low returns, and excessive risks, according to a White House Council of Economic Advisors report released today.
The Department of Labor’s proposed rule would require investment professionals to act in the best interests of their clients. “American workers who work hard and play by the rules should be rewarded,” said Mario Salazar, Legislative Director for U.S. PIRG. “Workers who spend their entire careers saving for their retirement should have the peace of mind that they are not being exploited by the financial professionals they hire to provide them with sound financial advice.”
U.S. PIRG thanks the DOL for moving ahead to protect hardworking Americans saving for retirement. “Closing loopholes and requiring Wall Street to put consumers first makes sense,” concluded U.S. PIRG Consumer Program Director Ed Mierzwinski. “We are also excited that both the President and Senator Elizabeth Warren will be fighting Wall Street’s attacks on the proposal as it moves through Office of Management and Budget (OMB) review to a public comment period.”
U.S. PIRG, the federation of state Public Interest Research Groups (PIRGs), stands up to powerful special interests on behalf of the American public, working to win concrete results for our health and our well-being. With a strong network of researchers, advocates, organizers and students in state capitols across the country, we take on the special interests on issues, such as product safety,political corruption, prescription drugs and voting rights,where these interests stand in the way of reform and progress.