Calling on the Department of Labor, President Obama announced this week that his administration is going to ensure that Americans retire with dignity.
Speaking during his weekly address, the president said, “In America, we believe that a lifetime of hard work and responsibility should be rewarded with a shot at a secure, dignified retirement.” Obama announced that at his direction, the DoL will release a new rule that would add a level of protection between investors and financial advisers.
This week, I called on the Department of Labor to change that – to update the rules and require that retirement advisers put the best interests of their clients above their own financial interests. Middle-class families cannot afford to lose their hard earned savings after a lifetime of work. They deserve to be treated with fairness and respect. And that’s what this rule would do.
A letter by DoL Secretary Tom Perez was sent out at the beginning of the week posing this question:
What’s the difference between a doctor, a lawyer, and a financial adviser? It may sound like a bad joke, but it’s a dead serious question.
When you’ve worked hard to build up a retirement nest egg, you’ve earned the right to sound advice. You deserve to know that your adviser is working for you. More than that, you deserve to know that they have a clear legal and ethical obligation to look out for what’s best for you. That’s just common sense.
Obama said that currently, there are “no rules of the road” and many advisers put their own financial interests over their clients by getting “backdoor payments” for “steering people into bad investments.” The annual costs from this “bad advice,” according to White House calculations, totals nearly $17 billion.
The president promised to push this new rule through despite pushback from special interests groups who will fight the measure. Though Obama said that he welcomes “different perspectives and ideas,” he will not accept “the notion that there’s nothing we can do.”
Concluding the weekly address, Obama said:
The strength of our economy rests on whether hard-working families can not only share in America’s success, but can also contribute to America’s success. And that’s what I will never stop fighting for – an economy where everyone who works hard has the chance to get ahead.