February 07, 2017

Warren Letter Highlights Financial Firms' Support For Fiduciary Rule, Urges Labor Department Not to Delay or Eliminate Protections for Retirees

Industry-leading financial firms ready to move forward with fiduciary rule, do not support delay

Text of today's letter from Senator Warren available here (PDF)
Responses from companies available here (PDF)

Washington, DC - United States Senators Elizabeth Warren (D-Mass.) today sent a letter to Acting Secretary of Labor Edward Hugler following President Trump's directive that the Labor Department re-examine the new fiduciary rule for financial advisers, which will protect consumers from predatory conflicts of interest that cost hardworking Americans $17 billion every year. The letter summarizes comments received by Senator Warren from twenty-one leading financial firms affirming widespread industry support for full and timely implementation of the fiduciary rule. These comments were sent in response to a letter from Senator Warren in January 2017. 

"Last month, in the midst of uncertainty regarding whether the Trump administration would take actions to delay or roll back this rule, I wrote to over thirty leading finance companies regarding their commitment to helping workers save for retirement, their support for the DOL fiduciary rule, and their preparedness to comply with the rule in April," Senator Warren wrote. "Twenty-one of these companies answered my letter. Their overall message was clear: this rule is good for workers saving for retirement and companies are prepared to meet the compliance deadline."

Industry leading firms including Vanguard, TIAA, and Transamerica expressed their support for the rule, and BlackRock emphasized that "We need immediate action, as the longer we wait the deeper and more difficult" the retirement crisis "problem becomes." In addition to general support, companies such as Charles Schwab, Capital One, and Lincoln Financial stated that they have spent time and resources investing in compliance with the new rule and fully expect to be ready to serve their customers under the rule's higher standard by April 10, 2017.

As Capital One wrote: "Capital One's investment business has been on a multi-year journey to reduce the number of commission-based products we sell to advised retirement clients because it aligns with our vision of serving clients by putting their interests first," adding, "It provides the added benefit of lowering costs for our clients."

The letter concluded: "the overwhelming voice of financial firms is clear: they support the goals of this rule; they have invested in this rule; they have planned for this rule; and they will be ready by the April deadline."

The full responses from the companies are available here.

In 2015, Senator Warren's office conducted an investigation into the widespread use of perks and kickbacks in the financial industry that incentivized agents to put their own interests ahead of their clients. This February, Senator Warren released an updated report showcasing the prizes and kickbacks still offered to investment advisors that will be eliminated under the new rule.