President Trump’s Directive Just Cost Investors $181 Million This Year
A US regulation requiring retirement advisers to put their clients’ best interests before their own profits when advising clients was slated to go into effect next Tuesday, but President Trump’s Labor Department on Tuesday announced a decision delaying the fiduciary rule by 60 days amid pressures from the financial industry.
The problem is that even the 60-day delay —let alone any further decision to scale back the rule or rescind it outright —will impact working people’s retirement accounts. Even the Trump Labor Department’s own initial analysis conceded that every day of delay means more conflicted advice, leading to up-front losses that multiply over time. The Labor Department originally estimated that the delay could cost investors $147 million in the first year, and $890 million over 10 years, in front-load mutual funds alone – though the final delay declined to adopt any estimate.
The Economic Policy Institute has constructed more comprehensive estimates and finds that the 60-day delay would cost retirement savers’ IRAs $181 million this year and $3.7 billion over the next 30 years —and this estimate is still an undercount because it does not include other subjects of potential conflicted advice, like 401(k)s.
Full Content: Fortune
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