EPI applauds release of final rule to protect retirement savers

The Economic Policy Institute welcomes the U.S. Department of Labor's retirement security final rule issued today to protect retirement savers from conflicts of interest in investment advice.

The version of the rule as proposed last fall would ensure that advice offered on rollovers to Individual Retirement Accounts, advice on the sale of insurance products, and advice to retirement plan sponsors is in the best interest of retirement savers, in line with rules protecting retirement savers from conflicted advice in other contexts. These protections are urgently needed as unscrupulous financial professionals seek out regulatory weak spots to take advantage of unsophisticated small savers and steer them toward high-cost and inappropriate investment products, including complex annuities that even financial economists struggle to understand. EPI thanks the Department for acting quickly in the face of the finance and insurance industry's delay tactics, and looks forward to reviewing the final rule in more detail.

"We are pleased to see that the administration has finalized this rule. When we consult a lawyer, doctor, or financial advisor for professional advice, it is because we don't have the same expertise as these professionals," said EPI President Heidi Shierholz. "Doctors and lawyers are required to act in their clients' best interest. It is absolutely common sense that professional advice from financial advisors should also be carefully regulated to ensure that it is in the best interest of the client."

"For too long, because of loopholes in the regulations, retirement savers have been misled by sales pitches disguised as advice," said EPI Senior Economist Monique Morrissey. "This rule will help level the playing field for advisors that play fair and expand the market for transparent and competitively priced investments, including annuities. The winners from this rule will be retirement savers and companies selling better products."

Read EPI's full public comment in support of the rule here.