ATR’s Matthew Adams wrote an op-ed for The Hill encouraging Secretary of the Department of Labor, Alex Acosta, not to appeal the 5th Circuit Court of Appeals recent ruling that vacated the Department’s fiduciary rule.
As Adams noted, this rule was imposed during the Obama administration, encompassed over 1,000 pages and put unelected Washington bureaucrats in between customers saving for retirement and financial professionals:
“The 1,000-page regulation was created with the intent of eliminating supposed conflicts of interest between financial advisors and clients. Even in its short implementation, it negatively affected how advisors gave advice to IRA and 401(k) customers planning for their future. The American Action Forum found that the rule would have increased consumer costs by $46.6 billion or $816 annually per account.”
Adams showed how financial professionals will move away from servicing accounts typically under $25,000 because of regulatory compliance costs, which punishes customers who are saving for retirement:
“Under the scope of the rule, financial professionals like broker-dealers, insurance agents, appraisers, and others who gave advice or guidance but otherwise had no real influence over a financial portfolio were considered to be fiduciaries, and therefore held to fiduciary liability. As noted in one study, 35 percent of advisors surveyed said they would stop servicing low-balance accounts typically under $25,000, and that one-fourth would increase their current client minimums.”
To read more of Adams’ op-ed, click on the direct link to The Hill.
To read ATR’s letter to Secretary Acosta urging him to not appeal, click here.