A recent study from the Alliance of Lifetime Income and CANNEX revealed that almost four out of five financial professionals have modified their approach to retirement planning in the last year. Why? Most pointed to rapidly rising inflation.
And while some Americans prefer to navigate today’s turbulent economy on their own, nearly 6-in-10 respondents of a recent survey said a financial professional could help them feel very confident to make the right 401(k) investment decisions.
Now more than ever, all Americans need access to a financial professional to help them with their retirement savings. With inflation recently hitting a 40-year high, this is certainly not the time to make it harder for people planning for retirement.
But that is exactly what the U.S. Department of Labor is considering.
The DOL is working to revive a fiduciary-only regulation that it adopted in 2016. This regulation would eliminate for many low- and moderate-income Americans the option of working with financial professionals compensated on a commission basis.
In 2018, a federal appeals court struck down this overreach. It makes no sense to resurrect this unneeded regulation given consumer protection enhancements adopted since then.
Robust state and federal rules – many passed in the past two years – are already protecting consumers. Indeed, 28 states have adopted new laws or rules that incorporate the enhanced consumer protections in the National Association of Insurance Commissioners updated model regulation on annuity transactions and align with the Securities and Exchange Commission’s Regulation Best Interest. Several more states are working on similar measures.
The timing couldn’t be better, because more and more Americans are recognizing the appeal of guaranteed income.
Annuity sales surged 16% to a record $79.4 billion in the second quarter of 2022. And no wonder. The Alliance/CANNEX study found that a large majority of Americans is worried about a recession impacting their retirement income (79%).
American savers have enough things to worry about. The DOL shouldn’t add to their worries by adopting a fiduciary-only regulation and making it harder for many of them to have ready access to information about annuities.
Susan K. Neely was President and CEO of the American Council of Life Insurers (ACLI), the nation’s leading trade association determined to help families live better lives by achieving financial security and certainty. As president and CEO, Neely drove public policy and advocacy on behalf of ACLI’s member companies that represent 93 percent of industry assets and serve 90 million families. She is CEO Emeritus through December, 2024.
