Regarding Helaine Olen’s June 27 PostPartisan blog excerpt, “ Good advice? Not likely” [Wednesday Opinion]:
With so many Americans entering retirement worried about outliving their savings, did it ever make sense for the prior administration’s Labor Department to effectively deny retirement savers access to annuities, the one financial product guaranteeing lifetime income? Absolutely not.
But that is exactly what the department’s fiduciary regulation did. With a faulty and subsequently debunked study alleging its rule would save Americans billions of dollars, the department pushed computer-generated “robo advisers,” in addition to “fee for service” financial advisers generally favored by the wealthy, for all Americans.
Fortunately, the U.S. Court of Appeals for the 5th Circuit voided the regulation, ruling that the department overstepped its authority and noting that “as DOL itself recognized, millions of IRA investors with small accounts prefer commission-based fees because they engage in few annual trading transactions. Yet these are the investors potentially deprived of all investment advice as a result of the fiduciary rule.”
The Securities and Exchange Commission, the states and other stakeholders now are working toward a more thoughtful rule to benefit all savers. They’re seeking a harmonized best-interest standard of care — appropriately tailored rules that would require all sales professionals to act in the best interest of their customers. This approach makes infinitely more sense than the department’s contentious, go-it-alone gambit.
Dirk Kempthorne, Washington
The writer is president and chief executive of the American Council of Life Insurers, a plaintiff in the legal challenge to the fiduciary regulation.