People pay ‘junk fees’ when they look for trusted advice that comes with hidden costs, President Biden said
The potential return of the fiduciary rule, which if passed would require more stringent regulations of financial advisers, received a mixed reception, with many in the financial services industry objecting to what it sees as “unnecessary” regulation.
The latest proposal is similar to the Obama administration’s fiduciary rule, officially known as the “Conflicts of Interest” rule, which was struck down in court during the Trump administration. With both proposals, the Biden and Obama administrations argued the rule could save retirement savers billions of dollars every year in unnecessary fees.
The latest proposal would target the fees associated with conflicts of interest. “Junk fees,” Biden said in a press conference on Tuesday afternoon, are what people pay when they look for trusted advice that comes with hidden costs. “Traditional pensions are no longer the norm, and guaranteed lifetime income through annuities lets people create their own pensions. That’s why annuity ownership is up,” she said in the ACLI statement.Many financial advisers, including broker-dealers, are already complying with the Securities and Exchange Commission’s Regulation Best Interest rule, which requires financial advisers to expose any conflicts of interest. Having too many rules may complicate matters.
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