SEC regulation will close loopholes allowing advisors to recommend products that do not offer benefits.
President Joe Biden and administration officials have announced tightened rules to clamp down on junk fees in retirement planning.
The Labor Department is using the Security and Exchange Commission’s (SEC) Regulation Best Interest to close a loophole allowing retirement advisers to recommend insurance products even if they do not benefit those saving for retirement. They also invoked the regulation to include advice fees in the retirement services offered, since single fees for one-time advice often add up quickly for retirement investors.
“Most financial advisers give their clients good advice at a fair price and are honest with them,” said President Biden at the announcement event at the White House. “But that’s not always the case. Some advisers and brokers steer their clients towards certain investments, not because of the best interests of the client, [but] because it means the best payoff for the broker.”
As the Lord Leads, Pray with Us…
- For the president and his administration as they seek to protect investors from junk fees.
- For Chair Gary Gensler to seek God’s direction as he heads the Securities and Exchange Commission.
- For Acting Secretary Julie Su as she oversees the Labor Department.
Sources: Reuters, White House, CNN
