Labor Department issues rule to crack down on bad retirement savings advice

[BumRushDaShow]

Source: CNBC

Published Tue, Apr 23 2024 1:00 PM EDT | Updated 12 Min Ago


The Biden administration issued a final rule on Tuesday that cracks down on the investment advice that advisors, brokers, insurance agents and others give to retirement savers.

The U.S. Department of Labor regulation — which follows a rule proposal in October — aims to ensure that investment recommendations are in savers’ best interests, according to agency officials.

In legal terms, the final rule expands the scope of when a broker, advisor or other intermediary must act as a “fiduciary,” meaning they are required to give advice that puts the client first.

The final rule takes effect on Sept. 23. It takes up the mantle of a prior effort by the Obama administration to rein in conflicts of interest in retirement accounts. That Obama-era “fiduciary” rule, which experts say was broader than Biden’s measure, was killed in court. Current retirement rules don’t provide adequate protections to savers, Labor Department officials said during a press call Tuesday.

Read more: https://www.cnbc.com/2024/04/23/labor-department-issues-rule-to-crack-down-on-bad-retirement-savings-advice.html

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Link to Department of Labor NEWS RELEASE - Biden-Harris administration announces rule to protect retirement savers’ interests by updating investment advice fiduciary definition

Link to RULE (PDF) - https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/erisa/retirement-security/final-rule.pdf

[Happy Hoosier]

1. The privatization of retirement.....

.... means that so many of us have to become pesonal finance experts. As I approach retirement, I have spent many hours on learning about personal finance. I enjoy it (mostly), but it is daunting.

[IronLionZion]

2. Very few are truly independent

most of them are working for some financial securities company to sell their investment products to unsuspecting people who think they are getting retirement planning advice. It's hard to regulate people to "do the right thing" when there's profit to be made by lying.

Most anyone can invest in simple stock and bond index funds and not even talk to these a-holes selling stuff you don't know about and can't trust.

[SunSeeker]

3. There's SO many financial advisors out there trying to sell retirement annuities.

It's really hard to figure out which ones are the best or would even benefit you.

[snot]

4. The history in this area

is a mess. This article capsulizes a lot of it but stops in 2016: https://www.investmentnews.com/industry-news/news/historical-timeline-of-fiduciary-duty-for-financial-advice-66755

Basically, various people in government keep trying to get some kind of duty imposed, but the industry keeps beating it back.

Note, Wall St. has been one of the biggest contributors to candidates in both parties for a long time.