Helping Americans build savings for a secure retirement is among the most important roles of the U.S. capital markets.

Individuals of all income levels can start investing, invest for the long-term, and have access to work with a professional financial advisor who serves as a critical link in helping investors meet their goals.

Working with our members who serve retail investors, SIFMA seeks to raise awareness of how financial advice and financial literacy programs can positively impact the financial health of Americans working to reach their financial goals, including purchasing a home, sending children to college and saving for retirement.

Changing demographics underscore the need for a robust private retirement system. Policy makers must continue to address the challenge of encouraging and facilitating saving and investing for retirement across our society. Today, U.S. workers are increasingly relying on individually funded retirement plans, such as 401k’s and IRA’s. Defined contribution plans account for $8.7 trillion in assets, growing at a 6.8% compound annual growth rate over the last decade. Both through their employers and individually, Americans today are largely responsible for building their retirement accounts themselves. Over half of total retirement assets are individually funded through defined contribution retirement plans and IRAs. Because individual savers play a greater role in the decision-making regarding their investments, access to a financial advisor is even more important today to help individuals prepare for their future.

SIFMA is committed to increasing retirement security for all Americans and has identified three primary pillars to reach this goal:

1. Expanding access to plans,
2. Increasing participation and decreasing leakage, and
3. Enhancing education.

In October 2023, the U.S. Department of Labor released a proposed “Retirement Security Rule” meant to expand the existing fiduciary standard that commonly covers advice over purchasing securities like mutual funds, to include new types of non-securities like fixed index annuities, advice to employers and plan fiduciaries, and onetime advice for transactions like 401(k) rollovers. On April 23, 2024, the DOL released its final rule.

Since the Department of Labor (DOL) first proposed a change to the definition of fiduciary, the landscape has changed greatly, most notably with the implementation of Regulation Best Interest (Reg BI) in 2020. Reg BI implemented a best interest standard that did not exist at the time of the 2015 DOL re-proposal and foundationally improved the protections in place for retirement savers. SIFMA long supported a best interest standard of care for brokers. That standard is now in place – it is robust and expansive with significant duties and obligations imposed on broker-dealers that unquestionably enhances investor protection. SIFMA is concerned that the Department’s newest proposal may go too far, inconsistent with existing federal regulations such as Reg BI and as a result could limit access to advice and education while also limiting investor choice in advisors.

On the other hand, the SECURE Act 2.0 is an important step toward enhancing the private retirement system and increasing retirement savings. Signed into law in December 2022, the Act includes important provisions such as higher catch-up contributions for workplace plans, an increase in the Required Minimum Distribution (RMD) age, and an avenue for the creation of emergency savings accounts. SECURE 2.0 represents a major victory for employers, individuals, and the retirement system and SIFMA is proud to have supported its passage. With efforts such as these, we can boost participation in retirement savings, enable Americans to save more, promote financial literacy and support a strong retail investor culture.