08/13/2024
"It is the latest example of a pervasive pattern: As the Biden administration tries to impose new restrictions on powerful industries, those businesses successfully turn to Congress and the courts for a reprieve. This time, the resulting clash centers on a basic question: Should federal law require more financial professionals to put retirees’ needs above all else — including their own paychecks — when they offer advice about how to invest?
In April, the Labor Department finalized rules that would subject a wide array of brokers to a higher legal standard, requiring them to act as fiduciaries. The effort primarily aims to protect the millions of Americans who leave their jobs, or otherwise need to roll over their retirement savings, and opt for tax-advantaged accounts such as IRAs — transactions that exceeded $770 billion in 2022 alone, according to federal estimates.
These savers face critical, one-time decisions about what to do with their money, and a miscalculation caused by conflicted investment advice could cut deeply into their retirement funds. But the Biden administration’s attempts to ensure Americans receive the best guidance have sparked immense political backlash, as financial services and insurance professionals try to avert what they see as costly, illegal federal mandates.
In July, the industries scored a string of critical early victories: Congress took the first step toward invalidating the new rules, while judges in two federal courts blocked the government from implementing the proposal nationwide in September, as planned, potentially setting the stage for the regulations to be scrapped.""
The financial services industry has blocked the Biden administration from requiring brokers to put retirees’ needs first — above lucrative commissions.