'Retirement Rip-Off Counter' underscores impact of Department of Labor's fiduciary rule delay

A digital counter will be projected on federal buildings in Washington to show how much retirement savers are losing daily with the delay of the rule's implementation

Apr 5, 2017 @ 2:00 pm

By Liz Skinner

A counter adding up the $46 million retirement savers are losing daily from a delay of the Department of Labor's fiduciary rule will be projected onto federal buildings in Washington to protest the Trump administration's efforts to postpone the regulation's implementation.

In the spirit of the National Debt Clock that shows rising U.S. debt, a "Retirement Rip-Off Counter" will be projected on to the Dept. of Labor and U.S. Chamber of Commerce buildings Wednesday night, according to proponents of the fiduciary rule. The counter seeks to illustrate that Americans are losing $532 a second or $17 billion a year without a mandatory fiduciary rule for retirement advice. Such a regulation was set to take effect on April 10, but has been formally delayed and may be further put off or amended.

"The delay is a way for Donald Trump to make a $17 billion gift to Wall Street," said Sen. Elizabeth Warren, D-Mass., in a Washington news briefing on Wednesday.

(More: DOL fiduciary rule supporters question agency's quick read of comment letters before sending final delay to OMB)

The Department of Labor released a final rule on Tuesday delaying the implementation of its fiduciary duty regulation by two months, providing a new applicability date of June 9. It's set to be published in the Federal Register on Friday and takes effect immediately. Mr. Trump has asked the agency to modify or repeal the rule if it will limit investors' access to financial advice or boost litigation for firms.

Rule opponents like the Securities Industry and Financial Markets Association, which represents brokers, and the Investment Company Institute, which represents mutual funds, have argued that the regulation is too complex, costly, and will restrict access to advice.

The dollar counter introduced on Wednesday is based on an estimate from the prior administration's White House Council of Economic Advisors two years ago that estimated Americans lose about $17 billion a year – or $46.5 million per day – from receiving conflicted advice in their retirement accounts. It was started on Feb. 3, the day when President Trump first said he would target the fiduciary rule for delay and can be found at SaveOurRetirement.com. It shows so far Americans have lost $2.9 billion.

(More: Savvy RIAs are waving the fiduciary flag)

The media event included Vietnam veteran Stephen Wingate, 69, who described advice he received from his broker in Illinois on his retirement accounts that cost him $147,000, more than half of his initial investment. He had told the broker he wanted conservative investments, but was invested in non-traded real estate investment trusts.

"Never in my wildest dreams did I think someone who was managing my retirement savings could be legally allowed to put his interests ahead of mine," said Mr. Wingate, who has filed a FINRA arbitration claim against the broker that is due to be heard in November.

Opponents of the fiduciary rule says that the current two-month delay is insufficient.

The DOL needs to act by June 9 to further delay or change the rule or "it risks creating significant market disruptions that will reduce retirement savers' access to retirement products, services, and related financial information and advice," the ICI said in a statement on Wednesday.

0
Comments

What do you think?

View comments

Recommended for you

RIA Data Center

Use InvestmentNews' RIA Data Center to filter and find key information on over 1,400 fee-only registered investment advisory firms.

Rank RIAs by

Featured video

Events

How (and why) to attract more millennial clients

It is time to take a hint from your grandmother if you want to attract more Gen Y clients. Amy Butte, the former CEO of the NYSE, says you need to learn to speak the language of financial services in a way millennials can comprehend.

Video Spotlight

Help Clients Be Prepared, Not Surprised

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

One adviser's story of losing his son to the opioid epidemic

John W. Brower, president and CEO of JW Brower & Associates, shares the story behind his son's death from a heroin overdose and how it inspired him to help others break the cycle of addiction.

Tax reform will boost food, chemicals, rail stocks. Technology? Not so much

Conagra and Berkshire Hathaway are two stocks that should benefit most from changes in the tax code.

Brace for steepest rate hikes since 2006 in new year

Citigroup, JPMorgan Chase predict average interest rates across advanced economies will climb to at least 1 percent in 2018.

Why private equity wants a piece of the RIA market

Several factors, including consolidation in the independent advice industry and PE's own growing mountain of cash, are fueling the zeal to invest.

Finra bars former UBS rep for private securities transactions

Regulator says Kenneth Tyrrell engaged in undisclosed trades worth $13 million.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print