What’s More Important: YOUR Retirement Savings, or Loopholes That Protect Wall St?

Mention the words “fiduciary standard” and a lot of eyelids grow heavy. But that was far from the case today as New York City Comptroller Scott Stringer, the Counselor to U.S. Labor Secretary Tom Perez and a host of New Yorkers concerned about protecting a serious threat to our retirement security joined me and my AARP NY colleagues.

We committed to closing a loophole in federal law that allows bad-acting financial advisers to pad their own pockets with big commissions by steering clients to high-fee, risky retirement investments that the White House estimates cost Americans $17 billion a year in lost savings.

That conflicted advice could mean workers losing about 25 percent of their lifetime retirement savings, and retirees running out of money more than five years earlier than if they were receiving non-conflicted retirement savings advice.

We call our effort “Stop Stealth Savings Stress” in the hopes that the tongue-twister will wake people up to a mostly silent problem that many Americans don’t even realize is eating away at their nest eggs – while the bad elements of Wall Street laugh all the way to the bank.

Secretary Perez has proposed a Labor Department rule to close the loophole and establish – yes – a “fiduciary standard,” which in plain English means all advisers must put their clients’ financial interests first.

It probably comes as no surprise that some Wall Street elements are already lobbying Congress to kill or dilute this rule; after all, profits are at stake.

But so is Americans’ retirement security – and the potential that they’ll need to lean on taxpayers for support. That’s where today’s strategy session came in.

Comptroller Stringer voiced enthusiastic support for closing the loophole, and numerous advocacy groups in attendance agreed to join forces with us moving forward on this effort.

I was thrilled that representatives for U.S. Senator Kirsten Gillibrand and Congresswoman Carolyn Maloney were with us at the Cornell Club. Their support is critical, and we hope Senator Gillibrand, Congresswoman Maloney and our partners can persuade our congressional representatives – not only from New York but across the nation - to stand with us, close the loophole and protect Americans’ retirement security.