In recent weeks, high profile Republican and House Speaker Paul Ryan has become an outspoken critic of the Department of Labor’s fiduciary rule.
The DOL proposal, aimed at providing retirement account holders with advice that serves in their best interests — rather than simply “suitable” advice that allows an advisor and his firm to put profits before clients — is set to be released in the next several weeks.
“When this rule comes down, we will be ready to do what we can to protect the savings of hardworking Americans,” Mr. Ryan said in a press conference earlier this month.
His complaint is that the fiduciary rule is too complex and costly — and would require an enormous amount of paperwork.
But is that really the reason Ryan is against the financial industry serving Main Street investors with the highest standard of care?
Let’s follow the money.
Since 1989, Ryan’s largest campaign contributors, according to OpenSecrets.org, include:
- Northwestern Mutual
- The National Assn of Insurance & Financial Advisors
- Investment Company Institute
- Credit Suisse Group
- Massachusetts Mutual Life Insurance
- American Bankers Assn
- JPMorgan Chase & Company
While the organizations themselves did not donate money to Ryan, the money came from the organizations’ political action committees, their individual members, employees or owners, and those individuals’ immediate families, according to Open Secrets.
These are among some of the largest companies that would be most impacted by a client-first fiduciary standard.
“Of the $4.6 million he has raised for his personal campaign, $419,812 has come from the securities and investment sector and $212,725 from the insurance industry, according to the Center for Responsive Politics,” writes Mark Schoeff, Jr., in a report for Investment News. “The financial industry is the largest contributor to his $1.6 million leadership political action committee, and insurance is the third largest,”
Just like fellow fiduciary-standard foe, Dave Ramsey, it seems Ryan has his own conflict of interest. And hidden profit motives among financial advisors are exactly what the fiduciary rule is meant to outlaw.
Photo: Gage Skidmore