Biden Takes Aim at Retirement Advisers in His Quest to Junkify Fees

Biden Administration Sets Sights on Retirement Advisers in Junk Fee Crackdown

Biden Administration Calls for an End to Retirement Plan Shenanigans

In a bid to kick some financial sense into retirement plan providers, the Biden administration is set to unleash a set of new rules that will close loopholes used by the industry to sell products that pad their own pockets, while leaving customers high and dry. This move is the latest in the administration’s mission to eliminate what they call “junk fees.”

According to the proposed Labor Department rules, retirement plan providers will only be allowed to sell commodities and insurance products, like annuities, to clients when it’s actually in the customer’s best interest. This means no more selling products just to boost their own commissions, leaving innocent savers hanging out to dry. As Lael Brainard, director of the White House National Economic Council, emphatically states, “When a retirement saver pays for trusted advice that is actually not in their best interest and comes at a hidden cost to their lifetime savings, that’s a junk fee.”

But wait, there’s more! These rules also raise the bar for Wall Street when it comes to providing advice during asset rollovers. So when people transfer their hard-earned money from an employer plan to another account, financial advisors will have to step up their game and give advice that truly benefits the savers. No more shady recommendations to maximize their own fees while leaving the customers in the dust.

President Joe Biden, in his quest to battle against “junk fees,” has teamed up with companies like Airbnb and Live Nation, who are also on a mission to eradicate these pesky extra charges. By addressing these issues head-on, Biden aims to show the American people that he is actively working to tackle rising costs and improve the nation’s economy.

The proposed Labor Department rule is a direct attack on brokerage firms that prioritize their own profits over the needs of investors. While the Securities and Exchange Commission already requires advice on securities purchases to be in the saver’s best interest, this authority does not extend to commodities or insurance products. And let’s face it, retirement savers are often targets for such recommendations.

• Preparing for Retirement: The Biggest Risks You Need to Avoid
• Sam Bankman-Fried’s Misadventures in the Media When Being a Savvy E...
• Shady Business in the Supreme Court: Donors, Private Jets, and Unet...

But fear not! The proposed rule will ensure that retirement advisers must always have the best interest of savers in mind, whether they’re recommending a security or an insurance product. It doesn’t matter where or when the advice is given, the savers come first. No more snake oil salesmen trying to trick innocent retirees!

Believe it or not, the federal law governing retirement plans doesn’t always require advisers to be strictly interested in the saver’s well-being, particularly when providing one-time advice like rolling over assets from a 401(k) plan into an Individual Retirement Account (IRA) or annuity. This loophole has allowed for some shady practices, leaving hundreds of billions of dollars in rollovers at risk.

The proposed rule will put an end to this madness, closing the loophole and ensuring that all advice given during rollovers is in the best interest of the savers. In 2022 alone, approximately $779 billion was rolled over from defined contribution plans into IRAs. It’s about time the savers get the protection they deserve!

So, let’s raise a glass to Biden’s battle against junk fees and questionable practices in the financial world. With these new rules in place, savers can have peace of mind knowing that their retirement funds are in good hands, and they won’t be taken for a ride.

ANBLE: Absolutely Not Bogus, Legitimate Economists

Did you enjoy this article? How do you feel about the crackdown on junk fees? Let us know in the comments below!

• BISV
• BISV08
• NRLIN:OGOV
• RSBI:REGULATORY-OVERSIGHT
• RULES:BIDEN
• RULES:USA-ELECTION-CANDIDATES