President Joe Biden is putting in place a plan to ensure that retirement savers receive solid financial advice.
A proposed Biden administration rule would require financial advisors to recommend investments in the best interests of their clients. (Source: Washington Examiner)
Pres Biden: Effective and Efficient Retirement Advisers
The Biden administration stated on Tuesday that it will propose a new Department of Labor rule that would broaden the fiduciary requirement to encompass index annuities, employer and plan fiduciaries, and one-time guidance for transactions such as 401(K) rollovers. According to Lael Brainard, Director of the National Economic Council, speaking to reporters last Monday, paying for trustworthy counsel that is not in their best interests and comes at a hidden cost to their lifetime savings is a waste price. Retirement advisers, on the other hand, should not be charged more for suggesting one investment product over another if it is not in the customer’s best interests. Retirement advisers may earn up to a 6.5% commission if they push one retirement scheme over another. According to the White House, requiring retirement advisers to make recommendations in the best interests of individuals can increase retirement savings by 0.2% to 1.20% per year.
According to a White House fact sheet, contradictory advice on fixed index annuities could cost pensioners $5 billion each year. This is bad for workers, families, and the US economy. President Biden and his advisors signed Secure 2.0 in December to encourage employers to improve retirement plan features and make saving more accessible. They also slammed Republicans for changing Social Security and supported the Butch-Lewis Emergency Pension Plan Relief Act sponsored by the American Rescue Plan. President Biden’s State Dining Room speech on Tuesday afternoon will address this issue.
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