FSR Testifies to DoL: Fiduciary Proposal ‘Extremely Complicated’, Harmful to Retirement Savers;


August 10, 2015

Contact: Erika Reynoso
202-589-2410 | @fsroundtable

Contact: Alison Hawkins
202-589-2410 | @fsroundtable

FSR Testifies to DoL: Fiduciary Proposal ‘Extremely Complicated’, Harmful to Retirement Savers;

Retirement savings, ‘Best Interest’ Standard Better Achieved Through FSR’s SIMPLE PTE

Washington, DC— The Financial Services Roundtable (FSR) cautioned the Department of Labor in testimony today that implementation of its fiduciary proposal will harm Americans’ ability to adequately save for retirement, limit access to financial advice and guidance for lower and moderate-income Americans, and overwhelm retirement savers with mountains of disclosure and red tape.

“The proposal is extremely complicated and impractical, and would adversely impact retirement savings, particularly for lower- and moderate-income Americans,” FSR’s Vice President and Senior Regulatory Counsel Felicia Smith said in written testimony. “Let’s fully enforce existing laws to remove ‘bad actors’ from the industry and further ensure all customers receive investment advice that is in their best interest.”

FSR urged the DoL to instead adopt FSR’s ‘SIMPLE’ proposal, which is intended to accomplish a customer best-interest standard in a more straight forward manner.

View FSR’s SIMPLE PTE proposal here: http://bit.ly/1OT6oRd

The Simple Investment Management Principles and Expectations (SIMPLE) proposal requires financial professionals and firms to put their customers’ interests first and allows professionals and firms to receive reasonable compensation for their services. It requires financial professionals and firms to provide customers with clear and concise disclosures in “plain English,” and requires them to adopt reasonably-designed internal controls and compliance procedures tailored to their business and operations. SIMPLE also further empowers regulators to hold financial professionals and firms accountable for any violation of rules.

While the DoL’s proposal is well-intended, it is too long, extremely complicated and impractical. It is expected to limit retirement investment services and guidance, limit retirement investment products commonly available today, require customers to review enormous volumes of disclosures on all potential investments, and require customers to sign a contract with a financial professional before even general conversations regarding retirement goals could take place. FSR believes these impacts could deter retirement savings at a time when more saving for retirement is urgently needed.

FSR’s full comment letter outlining FSR’s analysis of DoL’s proposed rule and its anticipated adverse impacts on Americans’ ability to plan and save for retirement can be read here.

A blog post further explaining FSR’s SIMPLE PTE can be read here and an infographic illustrating FSR’s SIMPLE PTE can be seen here.

For additional information on the value of using financial professionals and the importance of helping more Americans plan and save for retirement, visit www.protectourfinancialfuture.com.

FSR and its members stand ready to work with Secretary Perez, Congress and other policymakers to find the best solution for American retirement savers and small businesses.

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