Stop new regulations that will make it harder for Americans to save
It is no secret that most Americans are woefully unprepared for retirement. A recent report from the Employee Benefit Research Institute (EBRI) found “57 percent of U.S. workers have less than $25,000 in total household savings and investments, excluding their homes.”
As a financial professional that’s helped hundreds of individuals and families in our community prepare for retirement, I find these numbers troubling. What’s even more troubling is a new rule under consideration by the U.S. Department of Labor that could actually make it more difficult and more expensive for individuals to save.
Here’s how it works: Millions of middle-class Americans who are planning for retirement do so through an Individual Retirement Account (IRA). IRAs are the fastest-growing retirement savings vehicle in the U.S., and most are opened by financial professionals working on a commission.
Currently, this model allows small savers to access affordable investment advice, without having to pay large up-front costs or expensive annual fees, but soon that may no longer be the case.
It appears the Department of Labor is planning to issue an expansive redefinition of fiduciary responsibilities that could force IRA advisors to abandon the commission-based model and flee from the retirement-plan market altogether. This would create a void in the financial marketplace and leave millions of small investors with little to no access to affordable investment education and advice.
I hope our leaders in Washington will take a close look at this issue and work with the Department of Labor to ensure that any new proposal to redefine the fiduciary standard is written in a way that protects middle-class Americans access to affordable financial advice.
As chairwoman of the U.S. Senate Committee on Small Business and Entrepreneurship, Sen.
Mary Landrieu, in particular, is in a key position to take the lead on this. Let’s hope she will.
At a time when most Americans are saving less and living longer, the federal government should be doing everything it can to encourage people to prepare for retirement, not creating new rules that will make it harder or more expensive.
Patrick Coogan is a small-business owner and financial professional based in Baton Rouge, La.