Obama’s last stand as president has him pushing for justice among retirees who are getting swindled by brokers, too bad his bill will never make it through the houses chopping block. This Thursday the bill to “force brokers to keep their clients best interests in mind” was shot down by 234 representatives and supported by 188. Earlier in April, the Obama administration released this rule that will create a standard for financial brokers to keep their clients’ interests above their bottom line.
This isn’t the first time this rule has been in limbo. It was first proposed in 2010 and a year later the Labor Department had to retract it because of fierce industry disapproval.
Many Politicians and Financial Business owners are saying passing it would make buying options very expensive for Americans, and put a burden on stock brokers. They also argue that the rule doesn’t include other laws and regulations regarding financial advice.
“Bureaucrats in Washington, D.C. have no business getting between you and your financial planner. But that’s what the Obama administration’s fiduciary rule does,” say’s speaker Paul Ryan, The senate would have to pass a version and send it to congress before Obama can sign it into law. Obama states that the bill, “reflects extensive feedback from industry, advocates, and members of Congress, and has been streamlined to reduce the compliance burden and ensure continued access to advice.”
What does this mean for your retirement investment? A lot actually, since brokers are not held accountable for selling you assets that you don’t need, and nobody wants to buy, which generates the higher commissions for the broker (and the worst returns to you) from your hard earned cash. There is about $11.5 Trillion dollars at stake in 401k/IRA accounts, making retirees a prime target for fraud and questionable/unethical investments.