AARP has joined a coalition of organizations that is pushing to create tighter rules for investment advice for 401(k), IRA and other retirement plans. The Save Our Retirement Coalition aims to protect Americans’ retirement savings from hidden fees, undisclosed commissions and other conflicts-of-interest that enrich some investment advisers at the expense of their clients.
Did you know that currently, retirement advisers can offer you products that are “suitable” for you, but not necessarily in your “best interest?” In fact, there may be cases where the “suitable” product is a better deal for the adviser.
The retirement-advice loophole can be closed by a rule that has been proposed by the Department of Labor. The rule would require all retirement advisers to offer products that are in the “best interest” of their clients, not just products that are “suitable” for them.
Although some in the investment industry oppose changes to the conflict-of-interest rule, an AARP survey of employers that sponsor retirement plans found that 9 out of 10 support holding advice to a “best interest” standard. And the retired founder of Vanguard Financial Group, Jack Bogle, said during a White House conference call: “For as long as I can remember, I have pressed for a federal standard of fiduciary duty, a simple standard, a simple rule that stresses that clients come first.”
AARP thinks financial advisers should work just as hard to protect your retirement savings as you worked to earn it. “Bad actors on Wall Street can now give financial advice based on what’s best for their pocketbook, not yours,” says Nancy LeaMond, an AARP executive vice president. “AARP is fighting for a higher standard that holds bankers, brokers and insurance agents genuinely accountable to you."
To join AARP and its allies, sign a petition to close the retirement advice loophole at www.aarp.org/loophole.
Want to know more? Here is a great video that explains the Conflict of Interest rule.
Help close the loophole. Sign the petition now at aarp.org/loophole!