IRI warns of ‘unintended consequences’ in fiduciary changeNews added by Benefits Pro on May 30, 2014

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Joined: September 07, 2011

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By Lisa Barron

The Insured Retirement Institute issued a warning Thursday about the “unintended consequences” of the Department of Labor’s pending fiduciary rule.

The DOL this week said it will delay its fiduciary redraft from the original release date of August until at least January 2015.

The proposed rule will change the circumstances under which an investment advisor is considered a fiduciary under the Employee Retirement Income Security Act.

“IRI’s research has overwhelmingly demonstrated the benefits of planning for retirement with the help of a financial professional. Americans working with financial advisors to plan for their financial security in retirement exhibit better planning behaviors, save at greater rates, and have achieved overall higher levels of retirement savings,” IRI President and CEO Cathy Weatherford said in a statement.

“IRI continues to be concerned that a forthcoming rule proposal from the DOL could have unintended consequences that would ultimately deprive lower and middle-income Americans from accessing affordable retirement planning services and advice.”

She continued, “This new rulemaking timetable will provide more time and a new opportunity to work with the (Obama) administration to ensure that no rule proposal will prevent access to the important advice provided to Americans by their financial advisors. By working together, we can protect the client-advisor relationship and help ensure that all Americans have the opportunity to attain a financially secure and dignified retirement.”

The IRI said that its research results from a January survey of Americans aged 51 to 67 shows that investors are overwhelmingly satisfied with their relationship with their advisor.

Among the findings, eight in 10 said they are better prepared for retirement because of their financial advisor; three in four said they are likely to recommend their advisor to a friend or relative; and 80 percent are aware of potential conflicts of interest.

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