Published: August 2017

Fiduciary rule should extend to non-retirement accounts too

The Department of Labor’s fiduciary rule requires anyone providing investment advice regarding retirement accounts to avoid recommendations that create conflicts of interest. But why isn’t the rule applied to non-retirement investment accounts as well? In a letter to the Securities and Exchange Commission, advocates press for broader protections for investors, including a best interest standard for all personalized investment recommendations.

The Department of Labor implemented the fiduciary rule in June, making sure financial advisors put their clients best interest first when making recommendations regarding retirement accounts. However, more can be done to protect investors in this country. Currently the Securities and Exchange Commission (SEC) has legal and regulatory control over other types of taxable investment and savings accounts. In a letter to SEC Chairman Jay Clayton, consumer advocates urge the agency to extend the same pro-investor standard to non-retirement accounts, where broker-dealers have been permitted to market themselves as advisers, offering extensive advisory services, yet recommend products that are most profitable for them, rather than those that are best for the customer.

Lead Organization

Consumer Federation of America (CFA)

Other Organizations

AFL-CIO | AFSCME | Alliance for Retired Americans | American Association for Justice | Americans for Financial Reform | Better Markets | Center for American Progress | Center for Economic Integrity | Center for Economic Justice | Committee for the Fiduciary Standard | Consumer Action | Consumers for Auto Reliability and Safety | CtW Investment Group | Economic Policy Institute | Fund Democracy | International Association of Machinists & Aerospace Workers | International Brotherhood of Electrical Workers | NAACP | National Consumer League | National Employment Law Project | National Organization for Women | Pension Rights Center | Public Citizen | Service Employees International Union | The Center for Popular Democracy | The Midas Collaborative | U.S. PIRG | UnidosUS | UNITE HERE | United Mine Workers of America | United Policyholders | Woodstock Institute | Worker Owner Council of the Northwest

More Information

Click here to read the full coalition letter.

For more information, please visit Consumer Federation of America's website.

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