Volunteers from AARP descended on Washington bearing petitions in support of a fiduciary standard.
They planned to deliver the petitions, with more than 26,000 signatures, to the Department of Labor in support of the DOL's proposed rule that would protect investors in 401(k) plans and IRAs from conflicts of interest in retirement advice.
In announcing the proposed rule earlier in April, the DOL cited an analysis by the White House Council of Economic Advisors, which it said "found that these conflicts of interest result in annual losses of about 1 percentage point for affected investors — or about $17 billion per year in total."
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AARP members also plan to visit members of Congress to express their support for the rule and to try to forestall any attempts to circumvent the new rule. The senior advocacy group said in a statement that its efforts include speaking "to members of Congress about AARP's opposition to any legislation that seeks to stop or slow a proposed rule requiring all retirement advisers to give advice in their clients' best interest."
The DOL said that its proposed rule would "update and close loopholes in a nearly 40-year-old regulation." Not only would it expand the number of people subject to fiduciary best interest standards in the provision of retirement investment advice, it includes "a comprehensive economic analysis of the proposals' expected gains to investors and costs."
Also included are some proposed exemptions advisors must comply with if they are to continue to receive payments, such as commissions, revenue sharing and 12b-1 fees, that otherwise could result in conflicts of interest.
"[R]etirement investment advisers and their firms [would be required] to formally acknowledge fiduciary status and enter into a contract with their customers in which they commit to fundamental standards of impartial conduct. These include giving advice that is in the customer's best interest and making truthful statements about investments and their compensation."
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