In a speech to AARP on Monday, President Obama outlined new financial rules that would require investment advisers to put their clients interest ahead of their own, a concept called ‘fiduciary duty.’
For the first time in his second term, President Obama is picking a fight with Wall Street.
With Sen. Elizabeth Warren (D-Mass.) by his side, Obama announced Monday at AARP’s Washington headquarters that he is moving ahead with new regulations on financial advisers that are vehemently opposed by the business community.
Obama says the regulations, known as fiduciary standards, are needed to protect consumers against advisers who pocket commissions from big banks by selling faulty advice to unsuspecting investors.
‘If your business model rests on bilking hard-working Americans out of their retirement money, then you shouldn’t be in business,’ Obama said.
Warren went even further.
‘It’s about to time to do something that we should’ve done long ago — to end the kickbacks, the free vacations and the fancy cars … to ensure that all of our retirement advisers — and not just some of them — are looking out for the people they serve,’ Warren said.
— Peter Schroeder, Kevin Cirilli, The Hill
The financial services industry argues that this move will create ‘enormous paperwork for investment advisers and could result in people losing access to financial advice entirely.’ [See Obama Proposal Recognizes How Retirement Saving Has Changed.] Sigh… it must be so sad to lose easy revenues.