WASHINGTON, June 23, 2016 /PRNewswire-USNewswire/ -- The U.S. House of Representatives last night failed by a wide margin to override a veto by President Obama, thereby preventing millions of U.S. retirement savers and investors from continuing to suffer an estimated $17 billion in higher fees and lower returns on their nest eggs each year.
The U.S. House of Representatives did not muster the votes necessary to override President Obama's veto of H.J. Resolution 88, which would have nullified the Department of Labor (DOL) rule requiring financial professionals to act in the best interests of their clients saving for retirement. (A full veto override would have required a similar vote by the U.S. Senate.)
Americans for Financial Reform said: "Keeping the new DOL rule in a place is a big win. Americans need unbiased financial advice to build their savings and retire with more security. The $17 billion a year they have lost because of conflicted advice belongs back in their pockets, not Wall Street's."
The common-sense "fiduciary rule" protecting retirement savers and investors has attracted broad support from AARP, AFL-CIO, the American Federation of State, County and Municipal Employees (AFSCME), the Pension Rights Center, Americans for Financial Reform, Better Markets, the Consumer Federation of America, and many others. The key provisions of the DOL rule are as follows:
- Investment advisers must provide advice that is impartial and in the best interest of their customers;
- Advisers may receive common forms of compensation, such as commissions, provided they comply with the rules designed to protect customers from the harmful effect of those conflicts;
- Firms must acknowledge the firm and their individual adviser's status as fiduciaries;
- Advisers must make prudent investment recommendations without regard to their own interests, charge no more than reasonable compensation, and make no misrepresentations about their recommendations.
- Firms must eliminate common compensation and other practices that encourage and reward advice that is not in the customer's best interests.
- General financial, investment and retirement education is permitted, including newsletters, research reports and marketing materials.
- Consumers must be provided key adviser information at the time of a purchase and other important information must be maintained on the firm's website or be available upon request.
You can learn more about the conflict of interest rule here:
- Compilation of editorials, columns: http://saveourretirement.com/2016/04/editorialcolumnistnews-roundup-why-congress-should-protect-our-retirement-savings/
- Consumer Federation of American – 6 ways rule benefits retirement savers: http://consumerfed.org/wp-content/uploads/2016/04/6-Ways-the-DOL-Fiduciary-Rule-Protects-Retirement-Savers.pdf
- Obama veto message: https://www.whitehouse.gov/the-press-office/2016/06/08/veto-message-president-hj-res-88.
Why is this House veto issue a "front burner" issue for average Americans? Small account holders and moderate-income retirement savers stand to benefit most from the DOL rule. Less wealthy, often financially unsophisticated retirement savers are most at risk when it comes to investment recommendations that are not in their best interests. Often, those recommendations promote investment products with high costs, substandard features, elevated risks or poor returns. While the financial adviser may make a substantial profit off these recommendations, the retirement saver pays a heavy price for investment advice that is not in his or her best interest, amounting to tens or even hundreds of thousands of dollars in lost retirement income.
A broad range of experts are available with you to discuss the House veto vote.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/major-victory-for-us-retirement-savers-and-investors-as-house-veto-override-fails-rule-requiring-unbiased-investment-advice-remains-in-place-300289389.html
SOURCE Americans for Financial Reform, Washington, D.C.