WASHINGTON — President Barack Obama unveiled a significant retirement security proposal with Sen. Elizabeth Warren (D-Mass.) on Monday, announcing plans to bolster retirement accounts by curbing conflicts of interest on Wall Street.
The administration says Americans lose a combined $17 billion each year through hidden fees and conflicted investment advice. Investment specialists frequently steer investors into financial products that maximize benefits to the advisers or their companies, instead of their clients. To curb this, Obama plans to impose a new “fiduciary duty” on retirement account managers, requiring them to act in the best interests of investors.
“It’s a very simple principle,” Obama said Monday. “You want to give financial advice, you’ve got to put your client’s interests first.”
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Through it all, the Obama administration continued to delay the rule. The battle continued into December 2014, when top Democratic budget negotiators nearly accepted a Republican proposal to block the Obama administration from implementing it, until House Minority Leader Nancy Pelosi (D-Calif.) exiled the topic from talks over the so-called cromnibus bill.
The administration has not formally introduced a new rule for public comment, and once it does, it will be months before a final rule is implemented. The Obama team says the ultimate proposal will be more flexible than the 2010 plan, with broader exemptions for some investment planners. But Obama’s decision to put political capital behind a new rule has encouraged many financial reform advocates.
“It makes sense, it’s right and it’s important,” said Lisa Donner, executive director of Americans for Financial Reform.
