USA Today OpEd: Don’t Make It Harder to Save for Retirement

The following oped, Don’t Make It Harder to Save for Retirement, was originally published in USA Today on March 9, 2015.

It’s astonishing that the Labor Department would contemplate a regulation that would remove retirement choices.

The Obama administration is proposing a retirement rule that could restrict access to information, limit investor choice and raise costs on American families saving for retirement.

This isn’t about whether brokers and investment advisers should be subject to a fiduciary duty when doing the same thing. We agree with that. It’s a question of whether the administration should proceed, irrespective of congressional intent and in conflict with regulators, with a rule that will ultimately make it harder to save.

Most middle-class investors, including most IRA investors, choose more affordable, transaction-based brokerage accounts, as opposed to managed accounts, which are often more expensive because the client is seeking more services.

Financial firms provide both services to their clients, but the clients get to choose, based on what services they want to buy. Both types of accounts are already heavily regulated.

The administration proposal to change the rules could make saving for retirement much harder by taking away a service that many middle-class families use. As Congress intended, the administration should let the Securities and Exchange Commission do its job to develop a rule that would balance the need to enhance investor protections and protect investor choice, something the industry has long supported.

The U.S. retail financial advisory industry is heavily regulated and highly competitive. Investors can vote with their feet and their dollars, with tremendous ease every day. It is marked by efficient execution, lower costs and increased choice, with a robust process for investor redress. Far from the “Wild West” as some in the administration have stated, it is the envy of the world.

Through the development of savings vehicles such as 401(k)s and IRAs, saving and investing in America has been democratized. Yet even with all these options, we still aren’t saving enough. Which is why it’s astonishing that the Labor Department would contemplate a regulation that would remove retirement choices. Unfortunately for many hard-working Americans, Labor’s proposal, no matter how well-intentioned, could worsen the retirement crisis we face today.

Kenneth E. Bentsen, Jr.
President and CEO
SIFMA