WASHINGTON (Sputnik) — The US Department of Labor is taking steps to help American families save for retirement by toughing the rules that advisors managing retirement accounts follow, making it harder for them to overlook US citizen’s best interests, US President Barack Obama said.
“Today I’m calling on the Department of Labor to update the rules and requirements that retirement advisors put the best interest of their clients above their own financial interests,” Obama said at the American Association of Retired Persons on Monday.
Obama warned that many US citizens fall victim each year to financial advisors who “receive back door payments or hidden fees for steering people into bad retirement investments.”
The cost of such practices to middle and working class American families is estimated at $17 billion annually.
“The challenge we’ve got is Right now, there are no uniformed rules of the road that require retirement advisors to act in the best interests of their clients and that’s hurting millions of working and middle class families,” Obama said.
Earlier on Monday, the White House announced that the US Department of Labor would soon unveil its new proposed rulemaking for retirement advisors.
The new rules would include updating the different types of retirement investment advice for middle class families, give Americans the flexibility to choose their own financial advice, and allow advisors to continue providing general education on retirement savings.
