The Obama Labor Department today released a long-anticipated rule imposing new restrictions and obligations on a broad swatch of people and companies that offer investment advice. CEI Senior Fellow John Berlau expressed serious concerns about the new rule.
“The fiduciary rule is like Obamacare for your IRA and 401(k)," said Berlau. "If you like your brokers and investments, you might not be able to keep them.”
Berlau has criticized the rule because it will deter companies from serving middle class investors, creating a “guidance gap” that could cost an estimated $80 billion in lost savings. He has also warned of other harmful consequences – that the rule will harm Fintech and startup companies, that its reach is unexpectedly broad and burdensome, that it wrongly substitutes the judgment of regulators for that of investors themselves, and that the Labor Department lacks statutory authority to impose sweeping regulations on investment options.
See also: CEI's FAQ on the fiduciary rule.