The Consumer Federation of America and Americans for Financial Reform have joined together with the nation's largest employment unions and the AARP to mount a public campaign supporting of the Department of Labor’s proposed fiduciary rule for advisors overseeing retirement plans.
The rule would require advisors to act under a fiduciary standard, putting client interests ahead of all other considerations when making investment recommendations on accounts covered under the Employee Retierment Income Security Act.
The group launched a website, SaveOurRetirement.com, Thursday to educate investors on the issue and “mobilize” public support.
But a Change.org petition the group circulated at the beginning of the year has so far gotten meager traction.
“The website is part of an effort to mobilize the public in support of the rule,” said Barbara Roper, the CFA's director of investor protection. “To do that, we have to start by educating them that there is a rule proposal to support and a real problem that the rule is intended to solve.” The coalition will lobby lawmakers to support the proposed change.
Other organizations behind the campaign include the American Federation of State, County, and Municipal Employees (AFSCME), American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), Better Markets, and the Pension Rights Center.
Stephen Hall, a securities specialist at Better Markets, called the petition “a very powerful expression of public support for this initiative and that in itself can be of great value in any number of venues whether it’s on the Hill or over in the executive branch.”
Yet the petition has only 9 supporters as of press time on Jan. 15. Once it gets to 100, the group will send the letter to President Barack Obama, the DOL and Congress. “We’ll keep it open as long as it takes,” said Roper.
The DOL’s rule has been delayed multiple times since the agency first rolled it out in 2010. It was expected to be released in August according to the agency’s regulatory agenda, but an update in May pushed back the date to January.
Industry lobbyists have mounted significant pushback. The Securities Industry and Financial Markets Association and the Financial Services Institute have argued a rule similar to the DOL’s initial proposal could limit the public’s access to quality financial advice.
“Investor protection is of utmost importance to our members who provide affordable financial advice and services to Main Street Americans every day. We look forward to reviewing the Department of Labor’s re-proposed rule when it is released,” said Robert Lewis, vice president of legislative affairs for FSI, in a statement after the consumer group campaign was launched.
SIFMA’s President and CEO Kenneth Bentsen addressed the issue of the expected DOL proposal last month at a press briefing, saying “we’ve really been working on this since late 2009 and then with the rule proposal in 2010. There certainly was some pause, but there’s no question that the Department of Labor still has not made the empirical case for what they’re trying to do in the first place, nor did they have any resemblance of a true cost-benefit analysis of what the impact of what their original proposal would be.”