AARP got their comment letter just under last Wednesday’s deadline, as you knew it would. Little surprise—the nation’s largest lobbying organization supports a stricter fiduciary standard for retirement plan advisors.
“The rule, proposed in April, requires all retirement plan advisers to provide advice in their clients’ best interest,” writes David Certner on the organization’s website. “That is the simple goal underlying the new rule. And why not? You’ve worked hard your entire life. You’ve put away money for a secure retirement for years. And now, after a lifetime of saving, you are looking forward to a secure retirement—whether it’s more time with the grandkids or finally taking the time to travel.
“But what if one day you discovered that, over the years, 25 percent of your savings had trickled right out of your pocket?” he rhetorically adds.
It sounds like a nightmare scenario, he notes, but argues it’s a real concern thanks to “loopholes in the law that allow some financial advisers to give investment advice that earns them a higher fee—even if it’s not the best advice for you.”
He cites a Savings Coalition of America finding that 82 million households count on employer-sponsored plans or IRAs for their retirement security, and the supposed loophole could mean losing nearly a quarter of their hard-earned savings over their lifetimes.
“This is unacceptable,” he concludes. “It’s time to require all retirement investment professionals to act in their clients’ best interest. The current confusion is not just bad for retirement investors, it’s bad for those advisers who already meet the higher fiduciary standard.”
See Also:
- AARP Pushing Bill to Expand Massachusetts Retirement Savings Program
- State Mandated, Payroll-Deducted IRAs
- What Gives—Are Americans Confident in Retirement Security or Not?
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.
