A statement delivered to the White House by the Financial Planning Coalition called on the Department of Labor and the Securities and Exchange Commission to offer strong fiduciary rules to protect investors and stop retirement savings stagnating, Financial Advisor writes.
What the Coalition Statement Said
The Financial Planning Coalition supports the development of an SEC fiduciary rule, but believes it should complement rather than replace the DOL rule, the publication writes. A statement by the coalition highlights the importance of preserving 401(k) and retirement account growth in the long term, according to Financial Advisor.
The coalition called on Trump and the regulatory agencies to prioritize a fiduciary standard that prevents conflicted financial advice and protects savings, the publication writes. The growth of retirement accounts means more people are seeking financial advice, and without a rule in place, there is little protection, according to the coalition, Financial Advisor writes.
New rules would require advisors and registered representatives to put clients best interests first, but full implementation has been delayed since the memorandum to review the DOL’s fiduciary rule, according to the publication. The coalition said that although the rule already addresses some concerns, the delay jeopardizes the financial security of many investors, as billions of dollars are lost each year due to conflicts of interest, Financial Advisor writes.
The review of the conflicts of interest and disclosure sections, which only apply to qualified retirement accounts, has been extended until July 2019 by the DOL, according to the publication. The DOL rule, however, goes further than disclosure and has higher standards than current SEC rules, Financial Advisor writes.
The SEC requires advisors to put investors’ best interests first and says it plans to propose a rule by the second quarter to include brokers, who currently have no fiduciary standard, the publication writes. The coalitions says that complementary regulations from the DOL and the SEC will provide the best protection for investors against conflicted or unscrupulous practices, Financial Advisor writes.
The coalition concluded that “requiring advisors to work in retirement investors’ best interest is an essential and long overdue reform” and urged the DOL to continue working toward the full implementation of a fiduciary rule that benefits both businesses and consumers, according to the publication.