The DOL’s Proposed Rule Would Limit Advice For Those Who Need It Most

The Department of Labor (DOL) wants to change the way financial advisors work with clients – a change that would bring onerous new requirements and significant new restrictions to the industry. The rule would also result in reduced access for customers to the financial advice they need to plan their future. While well intentioned, the DOL rule would make it harder for Americans to plan for retirement, hurting those who need it the most low- and middle-income savers.

The DOL’s proposal would amend the definition of “fiduciary” under the Employee Retirement Income Security Act (ERISA), expanding the definition of an investment advisor so that thousands of MetLife financial professionals would be deemed “fiduciaries.”

The DOL argues that, with the reduction of defined benefit retirement plans and the increase in defined contribution plans, ERISA needs to broaden its ability to protect individual investors. While we all agree the customers’ best interests should be protected, the DOL shouldn’t take steps that discourage savers from securing the kind of professional advice that helps them save for retirement.

MetLife has a long history of supporting strong rules that protect investors. We want to do everything we can to ensure that more Americans save enough for retirement and that realistic protections are put in place to ensure that advisors act in clients’ best interests. But the rule, as proposed, would limit the information MetLife financial advisors can provide clients while driving up costs for consumers who want professional advice when saving for their retirement.

In short, the DOL’s proposal misses the mark and has extensive unintended consequences. Supporters tout it as a way to protect small investors, but the rule would have a disproportionate impact on low- and moderate-income customers who typically pay for advice through upfront commissions and could see their access to advice vanish from the marketplace.

The rule doesn’t just target retirement plans; it includes non-retirement benefits within employee benefit plans such as group life, disability, and other products. The rule would restrict the sale of products to plans with less than 100 participants and discourage smaller companies from initiating retirement plans for their employees.

MetLife has always been committed to helping all Americans plan for retirement in smart, effective ways that best suit their needs. With that in mind, we strongly urge the Labor Department to reconsider its proposed rule change.