Earlier this month, the Department of Labor issued landmark new regulations to strengthen protections for workers and retirees who turn to financial professionals for advice about their retirement investments. The biggest beneficiaries of the new rule are middle income retirement savers, both because they need to make every dollar count to afford a secure and independent retirement and because they are most likely today to be getting advice that is not in their best interests.
The rule aims at eliminating harmful practices that have become deeply embedded in the business models of sales-based financial firms. It does this by closing loopholes in the current regulations that have allowed brokers and insurance agents to masquerade as objective advisors while acting as self-interested salespeople, by requiring all financial professionals to make a legally binding commitment to set aside their own interests and seek to do what is best for the customer, and by requiring firms to eliminate practices, including compensation and personnel practices, that conflict with that goal.
This fact sheet describes the key benefits retirement savers will receive from this ground-breaking rule.