President Barack Obama is expected to direct the Department of Labor to press forward to raise investment-advice standards for brokers handling retirement accounts. The White House released a fact sheet before the President’s speech at the American Association of Retired Persons (AARP). The fact sheet states that part of the President’s focus on “middle class economics” is protecting workers and retirees from conflicted investment advice. A new fiduciary rule could help decrease investment fraud against retirees. An investment fraud attorney can help you discover fraudulent activities.
“A system where Wall Street firms benefit from backdoor payments and hidden fees if they talk responsible Americans into buying bad retirement investments – with high costs and low returns – instead of recommending quality investments isn’t fair,” stated the fact sheet. The Department of Labor expected action would expand the number of financial advisers who are defined as “fiduciaries” under federal retirement law.
In short, under the new rule, investment advisers for retirees would be held to a fiduciary standard, which would include putting their clients’ best interests ahead of the investment advisers’ own interests. The financial industry has aggressively lobbied against a heightened fiduciary standard since at least 2011 and we are very pleased to see that the federal government will not bow down to the well-financed securities industry. The financial industry has argued that a higher standard for treating clients would be too costly. We are happy to see that the federal government is intent on placing the protection of retired investors ahead of the financial interests of the securities industry.