Better Markets applauds labour Department's (DOL) historic rule beating Wall Street and putting retirement savers’ best interests first by requiring that brokers and other financial advisers giving retirement advice must put their clients’ best interests first, which will protect hardworking retirement savers from conflicts of interest.
Dennis Kelleher, President and CEO of Better Markets declared: “The DOL’s historic action today will directly help tens of millions of hardworking Americans trying to save for retirement. At a time when too many believe that Washington works for Wall Street rather than Main Street, this is a great victory for the American people who beat all the power, money and lobbying might of Wall Street, which waged a relentless war against this simple and sensible rule to require financial advisers at brokerage firms and insurance companies to put their clients’ best interests first. As a direct result, Americans will no longer lose tens of billions of dollars every year to high fees and poor returns. Rather than paying for brokers’ bonuses and fancy trips, that money will now help Americans retire with dignity and security.”
An adviser would need to provide information and disclosures about the types of investments he or she is recommending, as well as any commissions or perks tied to the recommendation, said Alicia Munnell, the director of Boston College’s retirement center.
Rokhaya Cisse, an analyst with Moody’s Investor Services, said that under the new rules, brokers will likely charge fees, instead of relying on commissions pegged to their sales of the investment products, although it’s unclear whether that could end up costing consumers more. Commissions and revenue-sharing payments will still be allowed, but the adviser has to sign a legal contract with the investor disclosing potential conflicts and committing to putting the client’s best interest first.
Please read the full press release from Better Markets and the article from the Boston Globe here.