Better Markets (February 27, 2024) - WASHINGTON, D.C. – Members of the Save Our Retirement coalition, listed below, have sent a letter to congressional leadership opposing policy riders that would prevent the Department of Labor (DOL) from finalizing, implementing, or enforcing the proposed Retirement Security Rule.

Due to loopholes in the DOL’s current out-of-date rules, some financial advisors and firms are free to put their own self-interest ahead of retirement investors’ interests. They can steer retirement savers into products, services, or account types that maximize the advisors’ profiles while risking their clients’ financial well-being. These products often come with excessive costs, poor performance, high risks, or illiquidity that can tie up savers’ hard-earned money for years, often when they need it most. This conflicted advice eats away tens of billions of dollars a year in retirement savings.  It’s taking a huge toll on the ability of millions of workers and retirees to have a financially secure and dignified retirement, ultimately resulting in further costs to state and federal budgets.

The DOL’s proposed Retirement Security Rule would close loopholes to ensure that all financial advisors are required to provide advice that is in retirement savers’ best interest and that any conflicts of interest do not corrupt their advice. It would apply this standard regardless of the type of financial advisor that the retirement saver turns to or the type of product that a financial advisor recommends, from securities to insurance and from real estate to precious metals.

Contrary to opponents’ claims, the DOL has written a carefully crafted rule well within its legal authority; existing rules simply don’t protect retirement savers adequately; and savers with modest nest eggs will not lose access to sound advice. Indeed, under the new rules, modest income savers can be more confident that the advice they receive is in their best interest, not the interest of the adviser. Studies claiming the proposed Rule would harm savers have been thoroughly debunked. As the Public Investors Advocate Bar Association recently testified, the argument “that the financial services industry is just going to stop giving advice to people if they can’t give them conflicted advice or rip them off is offensive” to those advisers who do put their clients’ interest first.

As the SOR letter to leadership notes, the financial industry should be focused on providing financial advice in their customers’ best interest, not trying to influence Congress to defeat a Rule that would require just that. The proposed DOL Rule is a tremendous accomplishment in the fight to improve our nation’s retirement income security and deserves the support of Congress. Efforts to defeat the rule only work against the best interests of American families and workers. The SOR Coalition urges Members of Congress to stand with their hard-working constituents who are doing their best to save for a financially secure and dignified retirement and reject any attempt to deny finalization, implementation, or enforcement of the proposed DOL Retirement Security Rule.