En español | A new AARP action page offers a place to comment on a Securities and Exchange Commission (SEC) proposal that is intended to help protect investors from hidden fees and other unfair risks.
AARP and other consumer advocates have voiced concerns about the rule and suggested changes to make it more effective in protecting retirement savers and investors. To help make sure the protections in the proposed rule are strengthened, the AARP web page offers a way for members and nonmembers alike to let the SEC know why it’s important to require all financial professionals to put their clients’ best interests first. The commission is accepting comments through Aug. 7.
According to one estimate, Americans lose as much as $17 billion each year because of profit-driven advice from financial advisers and brokers. Last month, the SEC started seeking public comments on the draft rules it has proposed that could prevent some of these losses. The proposal would require financial professionals to give clients disclosure forms with an explanation of fees; it also would prohibit some professionals from saying they are advisers.
In testimony Thursday to the SEC’s Investor Advisory Committee, AARP Legislative Counsel David Certner asked the committee to make sure the final rule does two things: clearly define the standard of conduct for investment professionals as a “fiduciary standard” — meaning they put their clients’ interests first — and provide investors with clear, effective disclosure forms.
“The current SEC proposal does not clearly define a ‘best interest standard,’ and we believe it must do so,” Certner said in a statement before the hearing. “Investors also do not understand the different legal standards, or the disclosure forms that apply to different types of financial professionals.”
The meeting with the Investor Advisory Committee followed an SEC town hall Wednesday in Atlanta, the first in a series of meetings the SEC plans on the proposed rule. Details on the meetings and other town halls can be found with the SEC here: https://www.sec.gov/news/upcoming-events.