Department of Labor Fiduciary Rule

Floor Speech

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Mr. DURBIN. Mr. President, retirement savings are crucial for our economic security, but too many Americans have little to no retirement savings because of low wages and the need to provide for their families.

Those who have been able to save for retirement are often confused by the unknowns of retirement planning and investing and depend on financial advisers to provide advice that is in their best interest.

However, loopholes in the retirement advice rules have allowed some advisers to recommend products that put profits ahead of their clients' best interest, hurting workers and their families, and jeopardizing our economic security.

The Department of Labor set out to update these decades-old rules to address conflicts of interest and require that financial advisers put their clients first, which is just plain common sense. Unfortunately, my Republican colleagues have voted to roll back this important consumer protection and voted to block the Department's fiduciary rule, an effort I did not and would not support.

While most advisers operate under a best interest standard, some advisers steered their customers into investments that award big commissions and incentives to the adviser but are not in the best interest of the customer.

No one knows this better than the Toffels of Lindenhurst, IL.

Merlin Toffel was a Navy veteran and an electrician, and his wife, Elaine, was an accountant. After more than 40 years of work, they had built up an impressive nest egg, but when Merlin was diagnosed with Alzheimer's and could no longer manage their finances, Elaine sought investment advice from an investment broker at their local retail bank.

The broker told her to liquidate their retirement account and sold them variable annuities to the tune of $650,000. Elaine trusted his advice because she thought that it was in her best interest. She later found out that those annuities charged fees in excess of $26,000 a year, and if she needed to access the money right away for an emergency, she would be charged a surrender charge of more than $45,000.

In the end, the Toffels lost more than $50,000 because of the broker's conflicted advice. Unfortunately, they are not alone. This is unconscionable and should not be allowed.

The fiduciary rule will require advisers to disclose their fees and ensure access to quality financial advice, restore confidence to savers, and protect them from receiving conflicted advice, which has the potential to erode billions from retirement accounts of hard- working Americans.

The bottom line is that we need to support policies that safeguard worker retirement savings and help them prepare for retirement, and the fiduciary rule does just that.

It saddens me that my Republican colleagues have acted to undermine American workers and families by blocking this rule. Thankfully, their efforts here today will not prevail because the President will veto this attempt to dismantle this important rule.

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