
Sep 10, 2015
the staff of the Ridgewood blog
WASHINGTON, D.C. – Rep. Scott Garrett (NJ-05), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, delivered the following opening remarks at a Joint Oversight & Investigations/Capital Markets Subcommittee hearing entitled “Preserving Retirement Security and Investment Choices for All Americans”:
Congressman Scott Garrett’s opening remarks as prepared for delivery:
Every day, millions of Americans look to a broker dealer or investment adviser for guidance on what to do with their hard-earned savings and to help them achieve a secure and prosperous retirement
Once a privilege enjoyed only by the super-wealthy, personalized investment advice and access to the financial markets is now something that can be enjoyed by Americans of all income levels
The 2008 financial crisis and the current market turmoil have highlighted the importance of such advice, as numerous studies show that investors who work with a financial professional receive better and more consistent returns on their investments, while those who invest on their own often times make the mistake of “buying high and selling low”
In fact, the Department of Labor estimated in 2011 that people who invest without the benefit professional advice make errors that can cost them $114 billion every year
That makes it all the more curious that this same Department of Labor is now marching forward with a regulation that will upend the ability of Americans to receive such guidance and which threatens the retirement security of the most vulnerable within our society
When President Obama announced the rulemaking earlier this year, a release from the White House stated that the rule “…is taking a step to crack down on those…Wall Street brokers…who don’t put the best interest of working and middle class families first.”
But in looking down our panel of witnesses today and in reading through some of the 2,300 comment letters received by the DOL, it’s pretty clear that the biggest impact of this rule is going to be felt far from Wall Street – and millions of middle or lower income households may ultimately have no place to go for advice
Moreover, the SEC continues to contemplate implementation of a uniform fiduciary standard under Section 913 of the Dodd-Frank, a rulemaking that remains unsupported by empirical data and which could directly conflict with a DOL rule
So it’s clear that the time for Congress to act is now – and I want to commend Mrs. Wagner of Missouri for her continued leadership on this issue and for again putting forth a thoughtful piece of bipartisan legislation that will help preserve access to financial advice for Americans of all income levels
I thank our witnesses again and look forward to the discussion today