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NY Times: Commentary: A New Threat to Your Retirement

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New York Times (11/19/15) – New York Times editorial page writer Teresa Tritch supports the Department of Labor’s proposed fiduciary rule. She opposes what she calls an “aggressive threat” to the rule — legislation being crafted by a bipartisan foursome in the House that would pre-empt the rule before it even emerges from the Labor Department. The four are two Democrats, Richard Neal of Massachusetts and Michelle Lujan Grisham of New Mexico; and two Republicans, Peter Roskam of Illinois and Phil Roe of Tennessee. “The idea of imposing a ‘best interest’ standard on retirement advisers should not be controversial,” asserts Tritch. “Investment advisers who register with the Securities and Exchange Commission and many other professionals who handle money for others already adhere to a best-interest standard.” But the four lawmakers, echoing objections raised by Wall Street, say that regulation to impose a best-interest standard would cause some retirement advisors to stop giving advice, especially to savers with modest balances. Tritch claims “that assertion ignores that the proposal on which the Department of Labor’s final rule will be based sets out a clear, enforceable best-interest standard for retirement advisors, while preserving the commission-based business model on which many salespeople depend.” By contrast, she notes, “the pre-emptive legislation now in the works would let advisers claim to adhere to a best-interest standard while continuing to steer clients into overly expensive offerings.” Tritch concludes that “President Obama should commit now to veto any attempt to derail the best-interest rule.” Full article