Feb. 3, 2017 – Americans for Financial Reform (AFR), American Federation of State, County and Municipal Employees (AFSCME), Better Markets, and Consumer Federation of America (CFA) put out the following statement on President Trump’s Memorandum for the Secretary of Labor regarding the Conflict of Interest (Fiduciary Rule).
President Trump continues his streak of throwing middle class Americans under the bus – the very people he promised to protect on the campaign trail. Today he plans to issue an executive order that threatens to strip working families and retirees of protections they desperately need when they turn to financial advisors for help with their retirement savings. Rolling back conflict of interest protections for retirement savings will take tens of billions of dollars a year out of the pockets of hard-working Americans in order to enrich powerful Wall Street interests.
If the Department of Labor follows through on this threat and delays and repeals the rule, brokers and insurance agents will be free to go back to putting their own financial interests ahead of the interests of their clients, recommending investments that are profitable for the firm but not the customer. And they will be permitted to do all this while claiming to act as trusted advisers.
With implementation of the conflict rule just months away, it is already delivering real benefits to retirement savers: costs are dropping for retirement advice and products; incentives to act against customers’ best interest are being eliminated; and investor choice of how to pay for advice has been preserved. All that will be put in jeopardy so that President Trump can cater to the powerful special interest groups that profit so richly under the status quo.
It appears that President Trump may be encouraging the Department to act illegally in rushing through a delay of the rule. When Wall Street attacked the rule court – attacks that have been thoroughly rejected by two federal judges – they claimed that the DOL wasn’t thorough enough in its rulemaking. Now they want to cut corners to delay the rule. We will be holding the new DOL accountable for following the letter of the law as it seeks to delay or kill the rule.