You can easily do this by the e-mail device found at www.saveourretirement.org. (While this is set up for submitting comments to the DOL, you can still use it to contact your Senators/Member of Congress).
[Better yet, also call the Legislative Counsel to your Senators and Member of Congress, and follow up with an e-mail of your letter of support.]
Here is my own letter to Congress, sent out today:
I write to urge you to opposed any policy riders to the budget bill which would delay the U.S. Department of Labor's finalization of its "Conflicts of Interest" rule.
The DOL's Conflict of Interest Rule has already proceeded through a re-proposal, two comment periods this year, and days of public hearings in August. Any further delay is not only completely unnecessary, but also will only serve to thwart finalization of this rule during the upcoming year - as opponents of the rule well know. Do not let Wall Street and the insurance companies succeed in their mission to delay and kill this important rule.
The DOL's Conflict of Interest Rule will substantially reduce the conflicts of interest currently present in providing advice to plan sponsors, plan participants, and IRA account owners. The Rule contains provisions which permit commission-based, reasonable compensation, while ensuring that recommendations are made in the bests interests of the client. Moreover, the Rule will lead to increased accumulations of capital, better securing the retirements of our fellow citizens while also leading to a new era of substantial U.S. economic growth.
The DOL's Rule is great for individual Americans, extremely beneficial for owners of business both large and small, and will lead to a new era of U.S. economic growth as capital is better accumulated.
Below I contrast the situation present today with the situation that will result following the rule's effective date:
The
Landscape Today
• Today, most small investors' primary retirement
savings are undertaken in defined contribution (DC) accounts.
• Most small investors don't seek out investment advice,
because they don't trust financial advisors.
•
Most small
investors receive educational presentations from non-fiduciary DC plan
"consultants" - but because providing specific investment
recommendations would trigger fiduciary status they leave such presentations
with two thoughts: "I really don't understand what was said" and "what
do I do now."
•
Most small
investors do not receive investment advice from non-fiduciaries currently – they either do not
meet the non-fiduciaries’ minimum investment requirements, or they are steered
into the highest commission or highest fee products – (good for the seller,
not for the investor).
• When smaller investors do receive investment advice,
which is most commonly associated at the time of a rollover to an IRA, current
pitfalls include:
• Such advice does not address whether an IRA
rollover is appropriate (versus staying in the DC plan, which could be more
appropriate due to differences in conditions for early withdrawals, loan
features, better investment options, etc.).
• Is usually limited to which investments to buy, and does
not address many of the tax considerations present (such as planning
options around company stock, Roth IRA conversions, tax-efficient portfolio
design and/or drawdown strategies, coordination with decisions on when to take
social security retirement benefits, annuitization of all or a portion of plan
assets, etc.). In fact, most brokers, insurance agents and dual registrants
disclaim the provision of this all-important financial and tax advice, often
leading to irreparable harm.
• Most of the larger Wall Street broker-dealer firms
don't serve small investors - they don't compensate registered
representatives on any clients who possess less than $100,000 - $250,000 of
investment assets.
• 20% to 40% of the returns of the capital markets are
diverted through costly intermediation
- the sale of highly expensive products. The academic research is clear: higher
fees and costs result in lower returns.
• Most Americans are sold produces, and don’t receive objective
investment advice. As a result, most Americans don't invest well, thereby accumulating
far less than they need for a secure and comfortable retirement.
• Excessive financialization of the U.S. economy results
in decrease of U.S. GDP by 2% per year (“Wall Street is a
macro-economic problem of the first order.” (Forbes, 5/31/2015, citing NY Times article IMF Staff
Discussion Note: “Rethinking
Financial Deepening, May 2015).
• Lower GDP growth and individuals ill-prepared for
retirement increases burdens on federal, state and local governments to
provide for needs of the elderly.
How the DOL Rule Will Change
the Landscape
• DC plan advisors, as fiduciaries, can
innovate and provide what plan participants need and want:
cost-effective, specific investment recommendations in group presentations.
• DC plan participants receive objective,
comprehensive, expert advice regarding the IRA rollover decision.
• The movement toward fiduciary investment
advice and away from product sales accelerates, following trends already
seen in the marketplace over the last decade or longer.
• Increased competition among fiduciary advisors occurs,
placing further downward pressure on fees for investment advice.
• Low-cost, fiduciary financial and
investment advice, already available to small investors through independent
fee-only advisors, becomes far more widespread.
•
As
more fiduciary advisors act as purchaser's representatives, more asset
management firms (who provide mutual funds, ETFs, REITs, annuities, and other investments
at far less cost. Controlling investors’ fees
and costs is part of their fiduciary duty.
• Total fees and costs relating to
financial and investment advice fall dramatically.
• Increased use of technology leads to innovation
in advisory firms and better, and low-fee solutions for all individual
investors.
• As majority of advisers become
"trustworthy'" the demand for financial advice soars - leading
to much better individual decisions on saving, smart expenditure
planning, taking advantage of tax-saving opportunities, and better investment
advice.
• Americans save, plan and invest
far better for retirement and other needs.
• Far greater capital accumulation
provide the fuel for innovations to be developed and deployed,
super-charging U.S. economic growth - and enabling federal debt to be
addressed quicker and better (leading to lower future interest rates, even
better economic growth).
• As many more Americans become prosperous,
government funding of needs declines, leading to lower income tax rates
and less pressure to cut benefits.
• An increased number of college
graduates entering into the financial services profession results - these
grads desire to provide expert advice, not sell products.
• Plan sponsors (employers both large
and small), who currently are often sued for being steered into choosing
high-cost investments in their DC plans, in reliance on recommendations from
non-fiduciary retirement plan consultants operating behind the low
"suitability" shield, receive far better advice from fiduciary
advisers who now share responsibility for plan menu choices.
Again, I urge you to oppose any rider which would delay this important rule making initiative. I urge you to support the DOL's finalization of the rule, which will empower your constituents to better secure their own financial futures.
Yours truly,
Ron A. Rhoades, JD, CFP(r)
Asst. Professor - Finance
Director, Financial Planning Program
Western Kentucky University, Gordon Ford College of Business
Contact via e-mail: ron.rhoades@wku.edu.
More information on this topic can be found at: www.scholarfp.blogspot.com.
(This correspondence represents my personal views, and not the views of any institution or organization with whom I may be associated.)
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