A new rule released today from the Department of Labor could suddenly make it a lot more difficult for individuals who would like to plan for their retirement, according to U.S. Senator Mike Enzi, R-Wyo.
While it will take time to review the thousand-page regulation, Enzi said if the final rule is similar to the one proposed last year, the new rule would restrict access and increase costs for average Americans looking to get financial advice to help plan for the future.
“This rule is a solution in search of a problem. Right now a kid with a paper route, a family with some savings, or a small business looking to help their employees can get retirement planning advice from an advisor without much hassle,” Enzi said. “I am concerned that this new rule would cut off access for that advice unless you have more money to pay for increased fees the rule would likely cause. We already have financial literacy problems and this rule could stifle access to the good information already available, hurting the exact people that the rule is supposedly designed to serve.”
Known as the “fiduciary rule”, the regulation would change the definition of individuals who provide investment advice on pension and retirement plans to a standard that requires higher costs and more paperwork for those seeking advice. Experts estimate that previous proposals of the rule would cause a loss of retirement savings of $68–80 billion per year, and will jeopardize retirement readiness for 11.9 million IRA and retirement participants.
Enzi has cosponsored legislation from Senator Johnny Isakson, R-Ga., Senator Mark Kirk, R-Ill, and Senator Roy Blunt, R-Mo., to block the rule.