Labor Secretary Thomas Perez planned to reveal a consumer protection proposal Tuesday in an announcement that many expected would be the DOL’s much-anticipated redrawn fiduciary standard.
Perez will be joined in making the announcement by Jeff Zients, the director of the National Economic Council and assistant to President Obama for economic policy.
The labor secretary has spent much of this year trying to rally support for stricter broker rules as Wall Street lobbyists lined up in opposition to the Obama administration’s plan.
In a recent speech to a group of consumer advocates, Perez said that one of his top priorities is to make brokers who manage retirement accounts put their clients’ interest ahead of their own. He said current rules enable biased financial advice that jeopardizes workers’ nest eggs.
Perez likened the situation with retirement savings to the sale of complex mortgages in the run-up to the housing market collapse.
“This is a first cousin of what I saw in the mortgage space,” Perez said at a Consumer Federation of America event in Washington. “Folks did not know they were victims because they went to someone they thought they trusted. It turned out the trust may have been misplaced.”
Perez is battling a phalanx of industry lobbyists as he seeks to eliminate what the Labor Department calls conflicts of interest that cost investors billions of dollars annually.
Labor’s proposal, years in the making, would require brokers to put retirement savers’ interests first, a standard known as fiduciary duty. It would apply to retirement accounts such as IRAs and 401(k)s, which now hold more than $11 trillion.