Conflicted Advice Hurts Retirement Savings in Every State

WASHINGTON, May 30 -- The Economic Policy Institute issued the following news release:

In a new analysis, EPI's Director of Policy Heidi Shierholz and Economist Ben Zipperer provide a state-by-state breakdown of how much retirement savers lose annually as a result of receiving on advice from financial advisers who have conflicts of interest. Annual losses range from $24.2 million in Wyoming to nearly $1.9 billion in California.

"The fiduciary rule will require financial advisers to act in the best interests of clients saving for retirement," said Shierholz. "The Department of Labor should fully implement and enforce the fiduciary rule to protect the savings of working people."

The rule, which was supposed to go into effect on April 10, was delayed until June 9th. The Trump administration is reviewing the rule, despite a six-year, exhaustive vetting process which found that these conflicts are "inflicting large, avoidable losses on retirement investors." This delay will cost retirement savers $3.7 billion over the next 30 years.

EPI Policy Center applauds Secretary of Labor Alexander Acosta for not further delaying the rule past June 9th, however, key compliance provisions built into the rule's exceptions have been further delayed to January 1, 2018. Moreover, the department announced that it will not enforce the rule between June 9 and January 1st. This means loopholes that allow financial advisers to take advantage of savers are not fully closed and retirement savers will continue to be harmed. Further, EPI expects new attempts to weaken and delay the rule in coming months, since the department has made it clear that it is considering proposing additional changes to the rule and delaying it beyond January 1.

Zipperer notes that the financial services industry is a sector of the economy with high wages and income while most workers' wages have been largely stagnant for 35 years. "It's long past the time for a common sense rule that requires the financial services industry not to rip off America's working people who are saving for retirement."