American Council of Life Insurers: Survey – Retirement Savers Concerned About Financial Harm Under Fiduciary-Only Government Regulation
A majority of moderate-income savers who are in or near retirement are concerned that a fiduciary-only regulation would keep them from the professional financial guidance they want and need, especially during difficult economic times. This finding is from a new survey by
A fiduciary-only regulation would eliminate the help moderate-income retirement savers receive from financial professionals who receive one-time commissions. Only those with substantial savings and higher incomes who can afford to pay ongoing fees for fiduciary services would have access to help from financial professionals. In 2018, a federal appeals court struck down a fiduciary-only regulation that was adopted by the
The Greenwald survey examined views on access to financial professionals for those ages 55 to 70, with life savings in the lower half of financial wealth when compared to all Americans of their age. They are either working with a financial professional receiving compensation based on commissions or are planning to start working with a financial professional within a year.
"These savers are not very confident that they can do key tasks to ensure financial security throughout retirement without the help of a financial professional," said
Moderate-income savers-- who tend to be more financially vulnerable - overwhelmingly value access to financial professionals who receive compensation by commission and feel they would be negatively affected without the guidance. Fully 85% believe they have at least a somewhat great need for financial guidance from a professional. And 81% feel the guidance they receive helps them feel reassured during difficult economic times.
Of those without a financial professional, almost all believe it would be important to work with one to feel reassured through difficult economic times (97%) and during times of high inflation (97%).
A strong majority of survey respondents (71%) viewed the guaranteed lifetime income from annuities as valuable and a majority also expressed strong interest in these products. Since annuities are sold on a commission basis, a fiduciary-only regulation would make this product unavailable to retirees who could benefit from them.
"The survey found that moderate-income retirement savers strongly oppose government regulations that would discourage or prohibit financial professionals from being compensated by commission," Greenwald said. "They feel that compensation by commission is sometimes preferable to ongoing fees."
The survey results can be found here (https://www.acli.com/-/media/acli/public/files/pdfs-public-site/public-newsroom/051822_greenwald_aclisurveymoderateincomeretirementsvrspresentation.pdf).
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