-
7/26/2019 The fiduciary standard and what it means for
retirement savings
1/23
DOL Confict o Interest
RulemakingPresentation by
Micah Hauptman to theNational Press oun!ation
"une #$% &'#(
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
2/23
raming )he Issue
DIY Retirement Planning Is ComplicatedHow much do I need to
save?
What should I invest in?Whom should I trust for advice?When I
leave a job what should I do?
!eave m" mone" in the old #$%&'( roll itover into a new
#$%&'( or roll it over intoan IR)?
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
3/23
Comple* In+estmentMarketplace
*eemingl" !imitless InvestmentChoices
)ll Come with ClaimsHigher returns+,ore diversi-cation+Downside
protection+
How Does )n Investor ,a'e )nInformed Decision?
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
4/23
Comple* In+estmentMarketplace
./uit"0Inde1ed )nnuit" ,ar'et 2alue)djustment
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
5/23
inancial Il literacy
*ad 3ruth4 Investors !ac' 5nowledge of6)*IC 7inancial Concepts
8ecessar" to,a'e Informed Investment Decisions 9n
3heir 9wnInterest RatesIn:ationRis' vs; return*toc's vs;
6onds,utual funds
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
6/23
inancial Literacy
If You Results4
Correct Incorrect Don,t -no.
Your Results8ational)verage ;@@ $;@% %; A
http://www.usfinancialcapability.org/http://www.usfinancialcapability.org/http://www.usfinancialcapability.org/http://www.usfinancialcapability.org/http://www.usfinancialcapability.org/
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
7/23
/o In+estors )urn toinancial Pro essionals
7inancial Professionals Hold 3hemselves 9ut )s 3rusted
)dvisers
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
8/23
/o )hey )urn to inancialPro essionals
7inancial Professionals Hold 3hemselves 9ut )s 3rusted
)dvisers
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
9/23
/o )hey )urn to inancialPro essionals
7inancial Professionals Hold 3hemselves 9ut )s 3rusted
)dvisers
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
10/23
0' 1ear Ol! 2RI/3 i!uciaryRule
Current De-nition Determining Who Is a7iduciar" is 3oo .as" to
.vade
)dvice must be provided on a Bregular basis9ne0time advice
&e14 rollover( isn
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
11/23
ine Print Legal Disclaimer
B uidanceprovided b"7idelit" iseducational innature is
notindividualiEedand is notinten!e! toser+e as theprimary or
solebasis for "ourinvestment orta10planningdecisions;
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
12/23
)he /tan!ar! )hat 3pplies4/uitability
*ales *tandard 8ot 3rust *tandard)cts more li'e a Bdo not
defraud standardthan advice standard9ut of all the suitable options
canrecommend the least suitableIncentives to recommend
whateversuitable product pa"s the advisor the mostPerverse
Incentives &.14 Bratchetedpa"out grids(
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
13/23
3ca!emic an! 2mpirical2+i!ence o Harm
Peer0reviewed academic studies thatshow bro'ers< incentives
tilting their
recommendations to funds thatunderperform,"ster" shopper studies
that showadvisors steering clients awa" fromlower0cost diversi-ed
funds towardhigher0cost funds in the advisor
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
14/23
)he Harm )o Retirement/a+ers
.vidence *uggests Con:icts )re CostingRetirement *avers
6illions
F%G billion a "ear &WH Council of .conomic)dvisers(Will cost
between F billion and F%@ billionover the ne1t %$ "ears if not
addressed &D9!(
3hese estimates are based on ane1amination of onl" one part of
the mar'et; 3he" don
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
15/23
)he DOL Confict o InterestRule
D9! Rule 3o Jpdate 7iduciar" Investment)dvice De-nition and
Related .1emptions
Closes loopholes so -duciar" dut" can
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
16/23
)he 5IC 2*emption
)llows Commissions *ubject to ConditionsDesigned to .nsure
Retirement *avers areProtected from Con:icts
,ust contractuall" agree upfront to serve investor
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
17/23
5etter Outcomes
Retirement *avers Will 6ene-t When 3heir6est Interests are 6eing
*erved
Recommendations will be based on what
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
18/23
DOL6s Deliberati+e Process
Rule is Years in the ,a'ing9pen and inclusive process
.1tensive comment process andhearings,an" changes from proposed
rule to
-nal rule designed to aidimplementation and compliance
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
19/23
inancial In!ustry Oppositionto Rule
,ainl" from 6ro'er0Dealer and InsuranceIndustr"4 eneral
)rguments
Claim the" are well0regulated and it7I8R) should determine
thatstandard
Response4 *.C>7I8R) have authorit" onl" oversecuritiesK
wouldn
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
20/23
inancial In!ustry Oppositionto Rule
*peci-c )rgumentsClaim commissions will be eLectivel"
illegal and as a result4Costs will increase*mall savers will
lose access to productsand services and ma'e worse decisions;
Response4 Commissions not bannedmultiple wa"s to receive
-duciar"advice
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
21/23
inancial In!ustry Oppositionto Rule
Congressional )ttempts to 5ill D9! RuleRetail Investor
Protection )ct &Wagner(
*trengthening )ccess to 2aluable.ducation and Retirement
*upport&*)2.R*( )ct and the )LordableRetirement )dvice
Protection &)R)P( )ct&Ros'am Roe(Resolution of
Disapproval
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
22/23
inancial In!ustry Oppositionto Rule
!egal )ttempts to 5ill D9! Rule !awsuits Have 6een 7iled &so
far(Common Claims4
Claim D9! e1ceeded authorit" to actencroached on *.CClaim D9!
didn
-
7/26/2019 The fiduciary standard and what it means for
retirement savings
23/23
)hank 1ou
Muestions?
Contact4,icah Hauptman
7inancial *ervices Counsel
Consumer 7ederation of )mericamhauptmanNconsumerfed;org & $
( O %$$#
N,icahHauptman
mailto:[email protected]:[email protected]
