An inside look at how the brokerage lobby is fighting the Department of Labor’s Fiduciary Standard mandate for brokerages handling retirement accounts. They’re going at it tooth and nail.
Taking a leaf from the Tea Party’s playbook, industry lobby groups formulated a “grass roots campaign” to get the word out to consumers and mobilize them against the rule. The Financial Services Institute, which represents the interests of independent brokerage firms like LPL Financial, Ameriprise Financial and Raymond James Financial. in July 2015 rolled out a website that advisors could use to have their clients send form letters to lawmakers. The group claims consumers sent a combined total of more than 100,000 letters expressing their opinion of the rule to their senators, local congressman and Labor Secretary Perez.
The Department of Labor released over 14,000 of these form letters from investors addressed to Perez. But when MONEY reviewed the first 100 of these so-called investor letters, 64% were from financial advisors and those related to financial companies. Only about 30 were from investors with no immediately discernible ties to financial companies, while the remaining six letter writers chose to withhold their identity.
This form of fake grassroots lobbying is also called astro-turfing. It’s dirty stuff.
Selfishly, I’m starting to hope they do manage to overturn DOL and preserve their Suitability Standard into the next decade. This will make the services offered by real fiduciary investment advisors look even better in comparison. As I said the other day, go ahead – I dare you. You will lose by winning.
If your financial advisor works at a firm that is actively lobbying against investor protections, I don’t know what to tell you.