Murray Denounces GOP Efforts to Block New Protections for Retirement Savers
Murray: “Families today have enough to worry about. Questioning the advice they get on their retirement accounts should not have to be one of them.”
(Washington, D.C.) – Today, Senator Patty Murray (D-WA), the top Democrat on the Senate Health, Education, Labor, and Pensions (HELP) Committee, urged her colleagues to vote down a measure from Senate Republicans that would block new protections for retirement savers from going into effect and would prevent the Department of Labor (DOL) from doing so in the future. In her remarks, Murray explained how DOL’s final fiduciary rule, which requires financial advisers to put their clients' best interests ahead of their own, would help protect Americans’ retirement savings accounts.
Key excerpts from Senator Murray’s remarks:
“Until now, financial advisers and brokers were under no legal obligation to work in their clients’ best interests. 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. M. President, we finally have a new protection that would right that wrong. It’s called the fiduciary rule. And it’s pretty simple. It says if you’re giving people advice on their retirement accounts, you should put the clients’ best interests ahead of your own. Unfortunately, we’re here today because Republicans want to block that new rule from helping families. That’s just wrong. And it’s not fair to people all over the country who are trying to put away money for retirement.”
“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 law currently requires, but others do not. Take the story of a man who had worked for 50 years as an electrical engineer for a utility company. His daughter shared this story anonymously. But I think it’s an important illustration of what’s at stake here for anyone who wants to save up for retirement. The man had built up a retirement nest egg in stocks and savings. When he was 80 years old, he sought out advice from 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 got paid with each and every transaction. But it ultimately whittled down the retiree’s savings by more than two-thirds. A few years of bad, biased advice – from a financial adviser – decimated 50 years of savings.”
“The Department of Labor went to great lengths to create a deliberate process and took the feedback from consumer groups and the financial industry to make it easier for them to implement the new rule. And many firms and advisers are already putting families first. So we know that working in clients’ best interest can work. That’s number one. Number two, 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. That law gives the Department of Labor clear authority to define a fiduciary as it relates to retirement savings. And finally, this rule will help savers, regardless of how big their retirement savings accounts are. Some of my Republican colleagues argue that financial firms will cut off advice for low and middle-income savers…In fact, they have the most to lose through financial advisers’ hidden fees and complicated financial products with lower returns.”
“M. President, over the years, millions of families have worked hard. They’ve put money away for retirement. And they’ve invested their savings to grow their retirement nest eggs. In short, they’ve tried to do everything right. Unfortunately, financial advisers have not always done the right thing. They haven’t had to. And that needs to change. But the resolution Republicans are offering today would be a major step backward. I urge my colleagues to reject this resolution. And instead of attacking families’ best chances at guaranteed unbiased retirement advice, I would hope my Republican colleagues will instead work with Democrats to ensure more seniors can have a secure retirement, expand economic security, and help our economy grow from the middle out, not the top down.”
Full text of Senator Murray’s remarks:
“Thank you, M. 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 our country works for all Americans, not just the wealthiest few.
“But for too long, the deck has been stacked against people trying to save up for retirement.
“That’s especially true for far too many people seeking out retirement advice.
“Until now, financial advisers and brokers were under no legal obligation to work in their clients’ best interests.
“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.
“M. President, we finally have a new protection that would right that wrong.
“It’s called the fiduciary rule. And it’s pretty simple.
“It says if you’re giving people advice on their retirement accounts, you should put the clients’ best interests ahead of your own.
“Unfortunately, we’re here today because Republicans want to block that new rule from helping families.
“That’s just wrong. And it’s not fair to people all over the country who are trying to put away money for retirement.
“So, let’s understand this new important protection and how it will help families.
“M. President, 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 retirement.
“In fact, almost half of Americans have less than $10,000 in savings.
“For households of people ages 55 to 64, they only have a little more than $14,000 in their retirement savings account.
“This is the group of people closest to retirement.
“So, 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 law currently requires, but others do not.
“Take the story of a man who had worked for 50 years as an electrical engineer for a utility company.
“His daughter shared this story anonymously. But I think it’s an important illustration of what’s at stake here for anyone who wants to save up for retirement.
“The man had built up a retirement nest egg in stocks and savings.
“When he was 80 years old, he sought out advice from 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 got paid with each and every transaction.
“But it ultimately whittled down the retiree’s savings by more than two-thirds.
“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 their 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 to make it easier for them to implement the new rule.
“And many firms and advisers are already putting families first.
“So we know that working in clients’ best interest can work. That’s number one.
“Number two, 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.
“That law gives the Department of Labor clear authority to define a fiduciary as it relates to retirement savings.
“And finally, this rule will help savers, regardless of how big their retirement savings account are.
“Some of my Republican colleagues argue that financial firms will cut off advice for low and middle-income savers.
“But I should 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 you that these savings aren’t “small” to the families that will rely on that money in retirement.
“In fact, they have the most to lose through financial advisers’ hidden fees and complicated financial products with lower returns.
“It’s time we protect so-called small savers from conflicted, biased advice.
“M. President, over the years, millions of families have worked hard. They’ve put money away for retirement. And they’ve invested their savings to grow their retirement nest eggs.
‘In short, they’ve tried to do everything right.
“Unfortunately, financial advisers have not always done the right thing. They haven’t had to. And that needs to change.
“But the resolution Republicans are offering today would be a major step backward.
“I urge my colleagues to reject this resolution.
“And instead of attacking families’ best chance at guaranteed unbiased retirement advice, I would hope my Republican colleagues will instead work with Democrats to ensure more seniors can have a secure retirement, expand economic security, and help our economy grow from the middle out, not the top down.
“Thank you, M. President. I yield the floor.”
