Donald Trump talked a big game on the campaign trail about standing up to big corporations and putting the interests of hardworking Americans first.
But as chairwoman, Trump has repeatedly broken his promises and now, hes dealing a blow to Americans saving for retirement.
In February, he set in motion a process to kill a common-sense rule that would keep fiscal advisers from siphoning off money from the clients who trust them. Right now, predatory financial advice cheats investors out of about $17 billion every single year. Under the new regulation, that fund would stay with the customers.
This new consumer protection, also known as the fiduciary regulation, was slated to take effect today, but President Trump has delayed it for 60 days and may kill the rule altogether. The rule would require financial consultants to act in their customers best interest not in their best interests or in the interest of their investment firm. Just like physicians take an oath to act in the best interest of their patients and lawyers take an oath to act in the best interests of their clients, fiscal consultants responsible for protecting the long-term financial health of Americans should be required to follow a high standard of care.
Before this rule existed, fiscal advisers could recommend products whose sales produced bonuses , commissions, or awards for the advisers, but that could cost their clients significantly more in higher fees.
The Trump White House has picked special interest and industry groups over hardworking Americans.
But with the new rule, ordinary Americans can trust that their financial adviser is working for them and not recommending investments to line the advisers own pockets. And the many fiscal advisers who already do put their clients interests first would no longer have to compete on an uneven playing field with those who are more interested in making a quick buck than they are in making sure their customers can build a secure retirement for themselves and their families.
Even though the rule hasnt been fully implemented yet, its already benefitting working families. Because the proposed rule was scheduled to go into impact, some major investment firms have slashed costs on their monies. Some have taken their worst, highest-fee products off the shelves. Others have eliminated some of the most predatory commission-based marketings practices altogether, and some have even generated brand new products that are less expensive and better for customers. In other terms, the facts of the case are clear: this rule is good for investors and good for advisers who put their clients first.
But despite these clear benefits, the Trump White House has picked special interest and industry groups over hardworking Americans. He has picked giant corporations over retirees.
Sixty days may not seem like a big deal, but according to economists at the Economic Policy Institute, simply this two-month delay will cost Americans saving for their retirement a collective $3.7 million dollars. And this is just the beginning. If President Trump succeeds in delaying this rule further or in killing this important consumer protection, the special interests and big corporations he rallied against will score a victory a $17 billion a year victory and the American people will be the ones left with the bill.
President Trump should make good on his campaign promises to stand up to the financial industry and give up on reversing the new fiduciary rule.
Saving for retirement is hard enough. Recent reports suggest that nearly one-third of running Americans have no retirement savings through retirement pensions or 401( k) . The least Washington can do is stand up to special interests and make sure the money Americans do manage to save isnt being siphoned off by predatory financial advice. Hardworking Americans shouldnt have to worry that their consultants dont have their best interests or their financial security in intellect. Its hour for President Trump to get on board with the fiduciary criterion or get out of the way by letting this common-sense rule come into effect. Americans have already waited long enough.
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