Rounds Statement on Fiduciary Rule
WASHINGTON—U.S. Senator Mike Rounds (R-S.D.), a member of the Senate Banking Committee, today issued the following statement after the Department of Labor (DOL) released its fiduciary rule.
“I oppose the fiduciary rule issued today, as it will have harmful consequences for American families saving for retirement,” said Rounds. “The rule will limit the availability of retirement investment advice for millions of people, especially low- and moderate-income Americans. The many regulations issued by the Obama administration consistently place undue financial burdens on already-overtaxed Americans, and the fiduciary rule is no different.”
In May 2015, Rounds, along with 35 senators, sent a letter to DOL Secretary Thomas Perez requesting the DOL revise its proposed fiduciary rule and extend the comment period. In October 2015, DOL agreed to rework its proposed rule. Unfortunately, the rule issued today will leave many without critical access to quality retirement advice.
Rounds is a cosponsor of S. 2502, the Affordable Retirement Advice Protection Act, and S. 2505, the Strengthening Access to Valuable Education and Retirement Support Act, both of which aim to establish more workable fiduciary standards and prevent the DOL’s fiduciary rule from being implemented.
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Requiring retirement investment advisers to abide by a fiduciary standard thereby putting a client’s best interests above their own profits isn’t going to place “undue” burdens on anyone except hard-selling Wall Street hucksters.
HEY MIKE are you buddies with wall street .
“The Department of Labor says its so-called fiduciary rule will make financial advisers act in the best interests of clients. What Labor doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts. Middle-income investors may be forced to look elsewhere for financial advice even as Team Obama is enabling a raft of new government-run competitors for retirement savings. Charging young investors for the privilege of loaning money to government, while handicapping private competitors and denying choices to middle-income consumers. This is no coincidence.’
http://www.wsj.com/articles/they-want-your-ira-1459985170
The government is 19 trillion+ in debt and they want manage our future retirement assets ?
What could go wrong…
What/Crossgrain:
Here is the problem with this rule from my perspective:
1). It is far-reaching on a lot of levels and will have large impact especially for those who are saving small amounts outside any formal plan (if they have one through their employer). It needs the light of day discussion via Congress.
2). With every protection comes a cost. People who are middle income and up won’t feel the cost but those who are saving smaller amounts will via less available products and higher costs. Especially in this low yield environment and the type of products that will be offered, their return will be wiped out. Losing the compounding of lower net yield, the impact will eliminate easily 25% of what they would have at retirement (maybe as high as 50%).
3). This will have no material impact on “Wall Street” but adversely impact the nation’s net savings rate.
There are goals associated with this rule I support and the final rule is significantly less onerous than originally proposed but it still has unintended consequences which are significant. What we are going to see is more packaged offerings with virtually no allocation choices and limited only to the safest vehicles (government bonds) that yield close to inflation and offer no real return (after inflation).
In effect, this rule forces these young savers/investors to buy products they should be buying when they are retiring to protect the corpus from market swings and deny them vehicles that over time have higher yields than these safest products. In short, this rule is forced effective “advice” that is contrary to what would pass for fiduciary advice. It should be called the “anti-fiduciary rule” as that will be its ultimate effect.