Consumer finance protection groups, including The Committee for a Fiduciary Standard and the Americans for Financial Reform, held a press conference Wednesday, vowing to fight for the fiduciary rule and to draw attention to its benefits for working Americans.
One of the ways they plan on generating publicity is by showing the cost to Americans for not being protected by the rule as a “Retirement Ripoff Counter.” Starting Wednesday evening, the groups will project the counter on the sides of several major Washington, D.C., landmarks—and will bring it to other major cities in the country, as well. The counter shows that without the rule protecting the interests of American investors, they are losing $1.9 million an hour, $46 million a day—and $17 billion a year.
“With Republicans in control of the White House, the Senate and the House of Representatives, consumer protection is under siege,” said Senator Elizabeth Warren (D-Massachusetts). “They want to ensure that the fiduciary rule does not go into effect. We want to ensure that financial advisers cannot cheat clients by putting their own interests ahead of theirs. This is big money we are talking about. The conflicts that exist today cost American families $17 billion a year.”
Warren called National Economic Council Director Gary Cohen’s recommendation that the Department of Labor (DOL) get a second opinion on the fiduciary rule “A sham. The Labor Department issued a 382-page analysis, more than 300,000 people have signed petitions in favor of the rule, and the DOL held four days of hearings on it,” she said. “This is a way for Donald Trump to make a $17 billion gift to Wall Street.” Just since February 3, when President Trump issued his memorandum telling the DOL to revisit the fiduciary rule, Americans have lost $2.9 billion to fees and commissions paid to unscrupulous advisers, she said.
Kathleen McBride, co-founder of The Committee for a Fiduciary Standard, said the impact of not having the fiduciary rule has serious consequences for retirement savers. “Two percent in extra commissions and fees can cut investors’ nest eggs in half. One percent strips out 28%,” McBride said. “The loopholes and conflicts of interest permit the systematic overcharging of investors.”
Micah Hauptman, financial services counsel at the Consumer Federation of America, said that the Retirement Ripoff Counter is based on the findings of the Council of Economic Advisers based on the sale of stocks and mutual funds—but that it does not include the more opaque areas of the market, such as Real Estate Investment Trusts (REITs) and annuities. If it did so, it would show that investors are losing far more than $17 billion a year, Hauptman said.
The groups pledge to continue to work with, even to confront, the DOL to protect the fiduciary rule. “We are prepared to challenge whatever the new DOL decides to do, whether it guts, repeals or delays its decision,” said Stephen Hall, legal director and securities specialist at Better Markets. “We want [the DOL] to adhere to the spirit of the law just as vigorously as the industry did when it launched its relentless attacks on the rule.”