New reforms proposed to tighten up the industry surrounding retirement advisors are to push ahead despite changes taking place by the SEC.
Senator Elizabeth Warren has spoken out about the need for the Labour Department to move forward with planned reforms surrounding the brokerage industry reforms, and she has said that these reforms should not be hindered by the Securities and Exchange Commission’s plans to bring it its own separate rules.
Senator Warren and President Obama have already called for changes to be made and for them to move forward quickly in the Labour Department with the aim of the reforms being to tighten up the brokerage standards surrounding retirement advice.
The changes are part of a long campaign to bring in much needed legislation to help to reduce potential conflicts of interests within the industry and to also combat the phenomenon of hidden fees.
However, according to Reuters, that effort could be complicated by a parallel track of reforms by the SEC, whose Chair Mary Jo White said she supported moving ahead with a similar effort to hold retail brokers to a higher “fiduciary” standard.
“I want to see the Department of Labour go forward now,” Warren told Reuters in an interview.
She added: “There is no reason to wait for the SEC. There is no question that the Department of Labour has the authority to act to ensure that retirement advisers are serving the best interest of their clients.”
While many are worried that the SEC new rules may lead to delays and could potentially allow Wall Street to water down the rulings, Senator Warren is convinced that government ruling would ensure tough rules regarding handing out retirement advice.
When speaking to Reuters, Warren also raised questions about White’s decision to unveil her position at a conference hosted by the Securities Industry and Financial Markets Association (SIFMA), a trade group representing the interests of securities brokerage firms.
“I was surprised that (Chair) White announced the rule at a conference hosted by an industry trade group that spent several years and millions of dollars lobbying members of Congress to block real action to fix the problem,” Warren said to Reuters.
So far both the SEC and SIFMA have failed to comment about Warren’s claims about the industry.
According to Reuters, the SIFMA has strongly opposed the Labour Department’s efforts, as it fears that new rules would contain draconian measures that would cut broker profits, and in turn, force brokers to pull back from offering accounts and advice to American retirees.