08.28.24

NEW: Government Watchdog Highlights Risk of “Conflicts of Interest” to Retirement Savers

New findings show how urgently needed the Biden-Harris Administration’s Retirement Security Rule is for workers and families

WASHINGTON – Today a new report from the Government Accountability Office (GAO) further exposes how common “conflicts of interest” are when financial professionals offer investment advice to workers on investing their hard-earned retirement savings. 

The report was requested by Education and the Workforce Committee Ranking Member Robert C. “Bobby” Scott (D-VA-03), Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Bernie Sanders (I-Vt.), and Senator Patty Murray (D-WA), President Pro Tempore of the Senate. 

The GAO conducted an extensive investigation into the risks and prevalence of “conflicts of interests” harming retirement savers.  Specifically, GAO interviewed financial industry associations, examined disclosures from over 15,000 firms, and conducted undercover calls to 75 financial professionals to identify conflicts and determine how they are communicated.  GAO found that “conflicts of interest” can be “numerous, complex, and dynamic” and are a “common part of many financial transactions involving products recommended to retirement investors.”

“Today’s GAO report affirms the urgent need for the Biden-Harris Administration’s Retirement Security Rule. I have long championed this rule and fought against efforts to nullify it. The Biden-Harris Administration’s sensible rule protects workers by helping to ensure they won’t get ripped off when investing their retirement savings,” said Ranking Member Scott. 

“Wall Street is taking advantage of working people by exploiting loopholes that allow financial professionals to steer retirement savers into more expensive, underperforming products. Thankfully, the Department of Labor’s new Retirement Security Rule puts an end to this unscrupulous behavior, and it’s my hope that the 5th circuit quickly removes the stay on its implementation,” said Senator Sanders.

“Financial planning decisions can have a huge impact on families’ finances as the effects from decisions they make today compound over years and even decades—that’s why it’s important to me people are able to get the information and help they need to make the best possible decisions for their families. It is not too much to ask that financial advisers, who millions of Americans rely on to help steer them toward a secure retirement, do what they can to avoid conflicts of interest. This report shows that more clarity and accountability are still needed to make sure people can be confident that the financial adviser they trust with their future is acting in their best interest,” said Senator Murray.   

To read the full report entitled, “Retirement Investments: Agencies Can Better Oversee Conflicts of Interest between Fiduciaries and Investors” click here. 

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