Cooler heads will prevail (hopefully). USA Today seems to have missed the memo that pretty much everyone dislikes the DOL’s fiduciary rule and is hoping for any kind of viable alternative. The paper rehashed elementary talking points in its popular “Our View” op-ed series on Sunday arguing for the rule’s passage and adoption.
Thankfully, Securities Industry and Financial Markets Association president Kenneth Bentsen took up the 401(k) flag and delivered a measured condemnation of the proposal in its current form.
Arguing the “opposing view,” Bentsen reiterated that the proposal would make retirement more costly and confusing for the majority of Americans.
While noting the industry’s history of support for a uniform standard of care and similar measures, he added that “[SIFMA] believes that DOL’s approach will do more harm than good. It is too complex and convoluted to work as proposed. If it becomes final without further review and input, it will harm the very people it purports to help.”
The USA Today editorial board, for its part, went all the way back to Gerald Ford and the passing of ERISA in 1975 to argue its point. Following PBS and similar outfits in describing of the present day retirement system as a “racket,” the paper mentions hidden fees and conflicts-of-interest in arguing for DOL fiduciary support.
“Not surprisingly, there is considerable pushback from the [advisors] who’d lose this money,” the editors claim in less than magnanimous fashion. “They’ve formed groups with names such as the ‘Coalition to Protect Retirement Security and Choice’ and ‘Americans to Protect Family Security’ that have been airing alarmist and specious ads about how the new rule would limit consumer choice and lead to higher costs.
“What these groups are really trying to protect is their fat fees,” the paper huffs, before concluding, “It’s impossible to see how investors would pay more in a world when all [advisors] would have to operate in investors’ best interests.”
If it’s “impossible to see” how added regulation will increase cost and complexity, we’re not sure who’s in more trouble—the 401(k) industry, or mainstream media outlets that purport to protect the interests of retirees.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
I’m all for a fiduciary standard, Joel, just not this fiduciary standard. Great in theory, awful in execution. Too disruptive to the people you’re trying to help. ‘Cost is no object’ doesn’t fly in retirement. Very real issue that requires a more measured approach to avoid unintended consequences.
Actually, USA today has it pretty much right. SIFMA is an industry organization whose members would have to change from a sales model to an advice model. It seems it is YOU who has it wrong and should not be trusted. Joel A. Larsen, Certified Financial Planner and Accredited Investment Fiduciary (yes, fiduciary!)
Not agreeing or disagreeing, I would just like to say this seems more like an attack post. I review this magazine periodically to learn, not to hear rants. I would be disappointed and eventually end my subscription if I saw more of this type of posting taking over in the future.