The White House National Economic Council Director (and former number two at Goldman Sachs, whose stock price went up 5% on the day he made his announcements) Gary Cohn said this about the Fiduciary Rule in an interview with the Wall Street Journal: “We think it is a bad rule. It is a bad rule for consumers. This is like putting only healthy food on the menu because unhealthy food tastes good but you still shouldn’t eat it because you might die younger.”
Encouraging people to die younger is one way to solve our retirement crisis. But we think a better way is to encourage people to save responsibly and invest well, so they’re able to live a long life in financial security.
The Wall Street Journal says, “The Fiduciary Rule, which was unveiled by the Labor Department last spring and is due to take effect in April, aims to hold brokers and financial advisers who work with tax-advantaged retirement savings to a fiduciary standard as opposed to the previous suitability standard. Under the fiduciary standard, advisers overseeing about $3 trillion in U.S. retirement savings would be required to work in their clients’ best interest and generally avoid the conflicts that can arise with commission-based compensation.”
It’s inarguable that we should act in the best interest of our customers. And, unsurprisingly, that’s what customers want, too! An overwhelming majority of the 1.3 million registered users of our financial advisory software and services that we’ve spoken to express a vital interest in being treated this way.
Equally troubling, the nominee for Secretary of the Department of Labor is not known for upholding the work of the Labor Department. As reported by the New York Times, he “was working at a law firm owned by a famous mob lawyer and casino owner whom the Department of Labor accused of squandering $25 million from his union workers’ person funds on sham investments…[he] told the jury it was not his boss’ fault for not paying back the money – it was overzealous regulators in Washington…’We should not be required to pay for the mistakes of the Department of Labor.'”
Underfunded retirement is the most serious financial disaster waiting to befall both current and future retirees and the nation itself, because the burden to support people in retirement will ultimately fall on all of us as taxpayers. And it’s tragic that providers of retirement accounts, who benefit from tax advantages bestowed by Congress to encourage retirement savings, so often charge high fees and put participants in inappropriate investments for the benefit of their own bottom lines.
Personal Capital already is and always has been a fiduciary of its customers’ money. We offer the world’s best personal finance management and financial planning software to anyone with an Internet connection or mobile phone. Importantly, we also offer human advice deeply integrated with our software. Our mission is simple: “Better financial lives through technology and people.”