Today, Labor Secretary Alexander Acosta announced his agency will proceed with the controversial fiduciary rule. CEI senior fellow John Berlau warns that the coming restrictions will mean less access to investment advice and services for middle- and low-income investors and urges further action by the administration and Congress. Statement by John Berlau
Labor Secretary Alexander Acosta has decided to let the controversial “fiduciary rule” begin to apply on June 9, while not disputing the devastating effects it may have on American savers. In an op-ed in today’s Wall Street Journal, Acosta acknowledges arguments that the rule, which imposes the government’s definition of “best interest” on the nation’s 401(k)s and individual retirement accounts (IRAs), “would limit choice of investment advice” and “likely be a boon to trial attorneys at the expense of investors.” He writes that the Labor Department has “no principled legal basis” to delay the rule further.
We encourage Secretary Acosta, President Trump, and members of Congress to heed the mounting evidence that the fiduciary rule is limiting investment choice and imposing new costs on middle-class and lower-income savers. Several companies already have stopped offering certain funds and drawn down retirement services in anticipation of the rule. In Great Britain, similar rules have resulted in brokers abandoning British savers with portfolios below $240,000.
Congress and the administration must do everything within their legal means to block and ultimately repeal the fiduciary rule as soon as possible.