Obama is finally (at least 7 years late) directing the federally governed Department of Labor to require retirement advisers working under its plans “to abide by a ‘fiduciary’ standard — putting their clients’ best interest before their own profit”.
The need for this change has been painfully obvious since the asset bubbles burst in 2000 and 2008. But nothing happened, and as financial fraud has run rampant since, an emboldened product selling business continues to inflict financial catastrophe on real families and the global economy. And we, the taxpayers, are all paying the staggering financial cost both for repeatedly rescuing reckless firms and in the crushing social burden of under-saved citizens. Maybe at long last, the politicians are worried enough about their own legacies, to start doing the right thing. See: Obama directs labor department to move ahead on Fiduciary rule.
Of course the financial lobby is fighting for its life in this. They insist that imposing a ‘fiduciary standard’ will bankrupt their business and cut working people off from affordable advice: ‘If you make us do what is best for the client, we will not be able to continue operating’ they insist. Laugh out Loud! With advice like this, who needs enemies??!!
A mandated fiduciary standard is absolutely foundational to rebuilding financial strength and stability in the world. The firms and actors who reject a fiduciary standard, cannot be allowed to call themselves ‘advisors’. Full stop.
President Barack Obama on Monday is expected to direct the Department of Labor to move ahead with a proposal that would raise investment-advice standards for brokers handling retirement accounts.
In advance of a speech Mr. Obama is scheduled to give at AARP, the White House released a fact sheet stating that protecting workers and retirees from conflicted investment advice is part of the president’s focus on “middle class economics.”
“A system where Wall Street firms benefit from backdoor payments and hidden fees if they talk responsible Americans into buying bad retirement investments — with high costs and low returns — instead of recommending quality investments isn’t fair,” stated the fact sheet, released early Monday.
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