Disapproving A Rule Submitted By the Department of Labor

Floor Speech

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Mrs. MURRAY. Mr. President, after a lifetime of hard work, all seniors should have the chance to live out their golden years on firm financial footing and with peace of mind. A secure retirement is also important to strengthening our Nation's middle class and ensuring that our country works for all Americans and not just the wealthiest few, but for too long the deck has been stacked against people trying to save up for their retirement. That is especially true for far too many people seeking retirement advice. Until now, financial advisers and brokers were under no legal obligation to work in their client's best interest, and without this requirement, some financial advisers have lined their own pockets by steering clients toward complicated investments. Some have recommended that retirees make transactions that come with hidden fees and some advisers get a commission when they sell a financial product, even if it doesn't make sense for the client.

We finally have a new protection that would right that wrong. It is called the fiduciary rule, and it is pretty simple. It says: If you are going to give people advice on their retirement accounts, you should put the client's best interest in front of your own. Unfortunately, we are here because Republicans want to block that new rule from helping families, and that is just wrong. It is not fair to people all over the country who are trying to put money away for retirement.

Let's understand this new important protection and how it will help families. Many Americans are not financially prepared for retirement. Middle-class wages have been stagnant for decades, and it is getting harder and harder for people to make ends meet let alone save for their retirement. In fact, more than half of Americans have less than $10,000 in savings. Households with people between the ages of 55 and 64 only have a little more than $14,000 in their retirement savings account, and that is the group of people closest to retirement.

Today families need every dollar they save for retirement to count. When people seek out retirement investment advice, many financial advisers do the right thing and put their clients first. They hold themselves to a higher standard than what the new law currently requires, but some others do not.

Take the man who worked for 50 years as an electrical engineer for a utility company. His daughter shared his story anonymously, but I think it is an important illustration for anyone who wants to save for their retirement. The man built a retirement nest egg in stocks and savings. When he was 80 years old, he sought out advice from a financial adviser--someone he thought he could trust. That financial adviser recommended he switch his savings to more complicated investment products. Those products came with a commission, so the adviser was paid with each and every transaction. Those transactions ultimately whittled down the retiree's savings by more than two-thirds--two-thirds of his retirement savings. A few years of bad, biased advice from a financial adviser decimated 50 years of savings.

The new fiduciary rule from the Department of Labor would close the loopholes that allow brokers and financial advisers to give their clients biased advice. Advisers will now make a legally binding commitment to the families they work with. Families today have enough to worry about. Questioning the advice they get on their retirement accounts should not have to be one of them.

Unfortunately, instead of standing up for retirement savers across the country, my Republican colleagues are dead set on saving the status quo. Republicans want to roll back this new protection that would help retirees keep more of their retirement savings, and they want to make sure the Department of Labor can never again create a protection to prevent financial advisers from bilking savers out of their hard-earned money. We know what the Republicans will say to defend this outrageous position, so let me go ahead and address those issues point by point. Contrary to what my Republican colleagues will argue, this is a workable solution. The Department of Labor went to great lengths to create a deliberate process and took the feedback from consumer groups and the financial industry itself to make it easier for them to implement this new rule. Many firms and advisers are already, by the way, putting families first, so we know working in the client's best interest can work. That is No. 1.

No. 2, the Department of Labor absolutely has the authority to create this important protection for families. In 1974, Congress passed the Employee Retirement Income Security Act, and that law gives the Department of Labor clear authority to define a fiduciary as it relates to retirement savings.

Finally, this rule will help savers regardless of how big their retirement savings account is. Some of my Republican colleagues are arguing that financial firms will cut off advice for low- and middle- income savers, but I want to remind my friends across the aisle that many firms have already figured out how to help these so-called small savers, and these firms are doing it while also adhering to the fiduciary standard. Republicans say their opposition to the rule is all about helping small savers, but I guarantee these savings are not small to these families who rely on that money in their retirement. In fact, they have the most to lose through financial advisers' hidden fees and complicated financial products with lower returns.

It is time we protect these so-called small savers from conflicted, biased advice. Over the years, millions of families have worked hard. They put their money away for retirement and have invested their savings to grow their retirement nest eggs. In short, they have tried to do everything right. Unfortunately, some financial advisers have not always done the right thing because they haven't had to, and that needs to change, but the resolution the Republicans are offering today would be a major step backward.

I urge my colleagues to reject this resolution. Instead of attacking a family's best chance of getting guaranteed, unbiased retirement advice, I hope my Republican colleagues will work with Democrats to ensure that more seniors can have a secure retirement, expand their economic security, and help our economy grow from the middle out, not from the top down.

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