In a comment submitted to the Department of Labor, EPI Policy Director Heidi Shierholz argues that there is no basis for revising the fiduciary rule at this time. Instead, DOL should implement the rule as planned and conduct a detailed review in three to five years to assess its impacts and determine if any revisions are needed based on data from the actual experience of implementation
The fiduciary rule requires that financial professionals giving advice to people saving for retirement act in the best interest of their clients, and not steer them into investments that pay a higher commission but offer a lower rate of return. The financial industry wants the rule weakened because they profit handsomely from being able to legally fleece retirement savers. Acting on a directive from President Trump, DOL has delayed implementing the rule for 60 days—a move that will cost retirement savers $3.7 billion over the next 30 years—and is now considering whether to weaken the rule.
“People who work hard to save for retirement need and deserve to know that when they go to a financial adviser, they are receiving honest advice, not a sales pitch,” said Shierholz, “The initial rulemaking process was unbelievably thorough. Any further information DOL gets during this request for comment is not going to meaningfully change the department’s ability to forecast the effects of the rule. This examination is a blatant attempt to weaken a rule that provides important protections for people who are saving for retirement.”
In her comments, Shierholz, who served as chief economist at DOL in the Obama administration, points out that the rule has already been thoroughly analyzed and vetted. The 382 page economic analysis concerning the likely impact of the rule was the end-product of an exhaustive, six-year process that incorporated the feedback from four days of hearings, more than 100 stakeholder meetings, thousands of public comments, and a detailed review of the academic literature. Ultimately the department found that the rule will “support consumer choice, and deliver substantial gains for retirement investors and economic benefits that more than justify its costs.”