The Patriot Post® · Labor Department Considers Rule Regulating Investing

The Labor Department is considering a rule that would rewrite the rules governing the relationship between investors and financial advisors. It’s a rule, like many of the Obama administration’s “reforms,” that will create a class of haves and of have nots, as the regulation will impede the ability for the middle class to talk to a financial advisor. As National Review described it in April, it’s ObamaCare for your retirement account.

Barack Obama started the ball rolling on rewriting fiduciary rules when he presented a speech before the AARP in February. “If you are working hard,” Obama said, “if you’re putting away money, if you’re sacrificing that new car or that vacation so that you can build a nest egg for later, you should have the peace of mind of knowing that the advice you’re getting for investing those dollars is sound, that your investments are protected.” And the Labor Department rose to the challenge. In order to claim the authority to regulate investing, Labor justified the encroachment by saying many companies run retirement accounts.

In proposing this change, the Obama administration is assuming two things. First, that government can make better financial advice than financial advisors. Second, that investment should be without risk. As a group of bipartisan lawmakers wrote to Labor Secretary Thomas Perez at the end of July: “The current proposal would bi-furcate the industry into those who can afford an advisor and those who cannot. The result will be less choice for consumers and a lack of access for retail investors to sound financial advice.” We liked our doctor, which makes us suspicious about Obama’s concern over our bank accounts.