Fiduciary rule set for Thursday House hearing
As the House Financial Services Committee hearing convenes Thursday on the Department of Labor’s “fiduciary rule,” Competitive Enterprise Institute senior fellow John Berlau hopes committee members ask one simple question: “What makes Department of Labor bureaucrats so innately smarter than average American investors at making investment choices?”
Berlau earlier revealed a shocking passage the DOL put into the proposed fiduciary rule that exposes the bureaucrats’ paternalistic mindset. The rule explicitly contends that individuals can’t “prudently manage retirement assets on their own,” and that they “generally cannot distinguish … good investment results from bad.”
Other key points about the fiduciary rule:
- Government isn’t a better judge of investments. Remember when would-be bureaucrat ‘investors’ blew $535 million on subsidizing Solyndra? (See Berlau’s FOX News.com op-ed.)
- Regulation destroys choice. Millions of middle-income investors could lose access to brokers and other service providers who provide guidance for 401(k)s and IRAs, as the new rules will severely restrict such services that don’t adhere to a government-defined “best interest” mandate. Berlau explains, “Under the new rule, financial professionals who provide even one-time guidance or appraisal of investments could find themselves classified as ‘fiduciaries,’ even if the clients they serve make their own investment decisions for their 401(k)s and IRAs.” In the end, people will be left with fewer choices of investment strategies and assets they believe could help protect them from volatile markets.
- People don’t want this regulation. Berlau and his CEI colleagues analyzed comments to the DOL on the rule and found a whopping 74 percent opposition to the rule from individual savers. During the comment period, the savers wrote heartfelt statements to the DOL like: “Stay out of my retirement investing,” and “I’m smarter than you think I am.”
Berlau concludes, “These sincere statements from savvy middle-class investors show why it’s imperative Congress keep the funding freezes for this rule currently in the House and Senate appropriations bills.”
Let me know if you would like to speak to John Berlau on this issue.
The hearing, entitled “Preserving Retirement Security and Investment Choices for All Americans,” is being held Sept. 10 at 10am by the House Financial Service Subcommittees on Oversight and Investigations and Capital Markets and Government Sponsored Enterprises.
For more information and analysis on the fiduciary rule, see:
Don't let Team Obama 'protect' your retirement account the way it has 'protected' your health care
Savers Oppose "Fiduciary Rule" Sold by Labor Department as "Protecting" Them