In June 2018, the White House let a piece of legislation known as the “fiduciary rule” drop, according to Bloomberg:
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The “fiduciary rule” is officially dead. The Labor Department rule, conceived by the Obama administration, was meant to ensure that advisers put their clients’ financial interests ahead of their own when recommending retirement investments.
The idea behind this rule was to prevent financial advisors from recommending investments they were incentivized to promote. It would instead encourage them to suggest investment opportunities in the best interests of their clients.
According to another Bloomberg piece, by dropping the legislation, questionable investments “soared” (emphasis ours):
So did the rule’s demise benefit Americans by empowering them to “make their own financial decisions,” as Trump indicated he wanted to do? The evidence suggests not. Sales of potentially questionable investment products have soared, and retirees stand to end up billions of dollars poorer.
So it would appear that, on top of the numerous other challenges retirees are likely to encounter, they could also lose billions of dollars thanks to this change in legislation.
And if that weren’t bad enough, Congress could make things even worse.
http://www.investmentwatchblog.com/congress-to-make-401ks-riskie
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