The American Action Forum, a conservative advocacy group, on Thursday charged that the Department of Labor’s proposed fiduciary rule for 401(k) plan advisors would cost the average retirement saver more than $1,500.
The organization bases its number on an assertion that investors would be forced to pay advisor fees for investment products and services for which they have already paid a commission.
“Even with a fee of just 1.2 percent, that’s $75.6 billion in duplicative fees on American retirement accounts,” the organization said.
Barbara Roper, the director of investor protection for the Consumer Federation of America, immediately called the claim baloney.
She says the duplicate fee charge has no basis in fact and thus renders the conclusions that follow completely worthless.
“In fact, the opposite is true,” Roper said. “If the rule is adopted, brokers will have to start putting the interests of customers first. It will be harder for them to justify recommending the high-cost products that pay them more over the investments that are best for the investor.
“That’s why they are spending millions, and putting out phony research like this, to try to kill the rule,” she said.
She also said that if the only way the industry can attack the rule is by mischaracterizing it, the DOL must be on pretty strong ground.