The Department of Labor is on the precipice of unveiling a tough fiduciary standard for professionals giving advice on pension plans, predicted Dennis Kelleher, the president and CEO of Better Markets, a consumer advocacy group, on Thursday.
The department is “serious about proposing a rule that is not loophole ridden,” he said during a telephone press conference held by the Institute for the Fiduciary Standard.
Kelleher says it’s become critical to impose a fiduciary obligation on advisors now that there has been a shift away from employer-managed plans to do-it-yourself retirement plans.
“No one would give the hard-earned money they’ve saved for their retirement to someone who didn’t have to act in their best interest, but that is what is happening every day,” he said.
Two other prominent investor advocates on the phone call said brokers were lining their pockets because they don’t have the same fiduciary obligation in dealing with retail clients that advisors do.
David Certner, the legislative policy director at AARP, said investors were getting predatory advice from brokers, while Barbara Roper, the director of investor protection at the Consumer Federation of America, said that the lack of a fiduciary standard gave brokers leeway to actively deceive customers.