Description: The Trump administration’s Department of Labor is actively working to weaken or rescind the “fiduciary” rule (the rule). The latest step in these efforts is an 18 month delay of key provisions of the rule. This delay is on top of earlier delays already put in place this year.
Fair Economy Impact: The rule simply requires financial advisers to provide what most clients probably already think they are receiving: advice about their retirement plans untainted by conflicts of interest. It would prohibit common practices such as steering clients into investments that provide lower rates of return for the client but higher commissions for the adviser. The financial industry strongly opposes this rule because it wants to preserve a system that allows financial advisers to give their clients advice that is in the adviser’s interest rather than the client’s. Conflicted advice leads to lower investment returns, causing real losses—an estimated $17 billion a year—for the clients who are victimized. We estimate that retirement savers who will get or have gotten bad advice during the various delays imposed by the Trump administration will lose a total of $18.5 billion over the next 30 years. Further, the rule is being delayed with the clear intent of never fully implementing it. Instead, the Trump administration is buying time until they can permanently dismantle key elements of the rule. People who have worked hard to save for retirement need and deserve the fiduciary rule to be fully implemented and enforced.
Actions:
- Hearing: Subcommittee on Health, Employment, Labor and Pensions May 18, 2017
- Entire rule delayed from April 10, 2017 to June 9, 2017. Key enforcement provisions further delayed until January 1st, 2017, and then even further delayed until July 1st, 2019.