Published: January 2024

DOL’s proposed rule would expand fiduciary requirement for those providing investment advice

Dozens of organizations signed on to a letter to the Department of Labor expressing support for the agency’s proposed rule that would provide comprehensive protections for consumers who turn to professional advisors for retirement investment advice.

Consumer Action joined dozens of other consumer advocacy organizations in a letter to the U.S. Department of Labor (DOL) strongly supporting the agency’s proposed rule that would strengthen protections for retirement investors who seek professional investment advice. Many investors turn to professional investment advisors looking for unbiased help making investment decisions for their retirement accounts. However, because of a loophole in the regulatory definition of who is considered a fiduciary under the Employee Retirement Income Security Act (ERISA) of 1974, some financial professionals may steer investors into products and services that maximize the advisor’s or firm’s profits but are not in the best interest of the investor. The DOL’s proposed rule would close the current regulatory loopholes by, among other things, applying to rollover recommendations, advice given to employers who sponsor 401(k) plans, and insurance products and other investments not currently covered, and by prohibiting the use of fine print legal disclaimers that allow firms to avoid ERISA fiduciary status.

Lead Organization

Consumer Federation of America

More Information

Click here to read the letter.

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