A roster of high-ranking and high-profile Democrats sent the Trump Administration a sternly-worded letter opposing the Department of Labor’s stance on fiduciary-related issues.
The signers included Senator Patty Murray and Congresswoman Maxine Waters, as well as Senators Kamala Harris, Elizabeth Warren, Bernie Sanders and 24 others.
Claiming the DOL’s rules “help financial advisors evade their responsibility to clients,” the said it will leave hardworking retirement savers at risk and without any meaningful remedies when they have been harmed.
In the letter, the members claimed the Obama administration addressed the issue of conflicted advice by establishing the fiduciary rule that” closed decades-old loopholes to protect retirees.”
SEE FULL TEXT OF THE LETTER HERE
“Instead of defending the Obama-era rule protections in court or improving upon them, the Trump administration reinstated an outdated and loophole-ridden standard that allows unethical advisors to cheat their retirement clients without providing the American public an opportunity to comment,” they argued. “Additionally, the Trump administration proposed a rule that gives workers no legal recourse when they’ve been cheated by financial advisors while investing their retirement savings.”
A rush to rulemaking
The members also called out what they said was the Department’s rush through the rulemaking process despite requests from stakeholders for a more deliberative process.
Murray and Congressman Bobby Scott previously called for the Department to extend the unusually short 30-day comment period—which it refused to do.
Murray also requested the Department of Labor hold a hearing on the proposal. She noted that while ERISA states the secretary may not grant prohibited transaction exemptions like those advanced by these proposals “unless he affords an opportunity for a hearing”—the Department refused to hold such a hearing.
“At a minimum, workers investing their hard-earned savings for their retirement should have confidence that financial advisors are acting in their best interest and not providing them with conflicted advice,” the members wrote. “The Department’s continued insistence on enforcing these restrictions will further harm vulnerable students and make it harder for institutions to provide effective support.”
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.
