CEO DATELINE - Business groups sue to overturn new restrictions for retirement advisers
CEO DATELINE - Business groups sue to overturn new restrictions for retirement advisers
- June 2, 2016 |
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Walt Williams
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Some of the nation's largest business groups announced Thursday they have filed a lawsuit seeking to strike down a new Obama administration rule requiring retirement investment advisers to put their clients' interests ahead of their own.
The U.S. Department of Labor rule adopted in April requires retirement advisers to meet a "fiduciary" standard. In practical terms, the change means advisers must provide impartial advice in their client's best interests and it prevents them from accepting payments to steer clients toward certain investments.
The White House alleges such conflicts of interest lower annual returns on retirement savings by 1 percent, costing U.S. families $17 billion every year. http://1.usa.gov/1XkENk1
Financial Services Roundtable, the U.S. Chamber of Commerce and the Securities Industry and Financial Markets Association are among the nine groups that argue in the lawsuit that the new rule will hurt consumers more than it will help. In a joint statement, the groups said the rule prevents advisers from providing the level of "holistic financial advice" their clients have come to expect.
"Instead of helping savers plan for retirement, the new rule will unfortunately restrict their access to affordable retirement advice and limit their options for saving," the groups said. "The rule will shackle Main Street financial advisors with extensive new requirements and constant liability, forcing them to limit the options and guidance they provide to retirement savers."
The groups said the rule will cause advisers to stop servicing many small businesses, "significantly reducing the retirement savings options available to their millions of employees."
The lawsuit was filed in U.S. District Court for the Northern District of Texas. http://bit.ly/1t3RBPo
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