Last week, President Obama revealed his latest plan to push Americans out of private investment accounts and into government-run plans. According to Young Conservatives, Obama’s new regulations aim to push private retirement savings into government accounts.
The Department of Labor claims that their so-called fiduciary rule will force financial advisers to act in the best interests of clients. However, what they are neglecting to mention is that the new rule carries such large potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts. Middle-income investors will likely be forced to look elsewhere for financial advice while Obama’s government is enabling a raft of new government-run competitors for retirement savings.
This new regulation will begin in January, just as Obama is leaving office. The rule will allow financial firms advising workers to move money out of company 401(k) plans into Individual Retirement Accounts, and they will then have to follow the new higher standards.
The Department of Labor has already proposed waivers from the federal Erisa law so new state-run retirement plans won’t have the same regulatory burden as private employers do.
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