Signature needed: Tell Senate Democrats: Stop Wall Street retirement scams

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Tell Senate Democrats: Stop Wall Street retirement scams

Petition to Senate Democrats:
"Oppose any efforts to delay or weaken the Department of Labor's pending 'fiduciary duty' rule, which would help prevent brokers from scamming America's retirees out of billions each year."

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Dear 5849376,

Wall Street is not our main street

Do you plan on retiring someday? If so, listen up.

Wall Street scams Americans out of up to $17 billion of their retirement savings every year. Broker-dealers have been caught giving workers bad advice in order to win a commission, or even to score kickbacks for hawking certain products. The people who trust them lose their life savings, their economic security, and their peace of mind.1

President Obama has teamed up with Senator Elizabeth Warren and the Department of Labor on a plan to demand all financial advisors, including broker-dealers, work in their clients' interests. But now, Republicans are trying to block and delay protections for retirees – and we need to make sure no Senate Democrats join their crusade to defend Wall Street scam artists.

Tell Senate Democrats: Stop Wall Street retirement scams. Click here to sign the petition.

Can you tell the difference between an impartial, registered investment advisor, and a broker out to make a buck? The latter will cost the average American between 5 and 10 percent of her retirement savings, and the horror stories are even worse. For example, after 30 years on the job, one retiree cashed out on the hyped-up promises of a broker. Instead of the promised nest egg to leave to his kids, he's at risk of losing his home of 40 years. Another retiree, from New York, can't afford to visit his grandkids after a broker scammed him out of 75% of his life savings. There are even accounts of couples in their sixties living in trailer homes when they thought they would retire in modest comfort, because of misleading advice from brokers.2,3

Many retirement advisors, including registered investment advisors, are held to a standard of working in their clients' best interest – known as "fiduciary duty." In contrast, brokers are held to no such standard. They reportedly offer grand, unrealistic promises in order to score clients on commission, and even get paid to funnel your money into certain investments.4 They can make six figures or more, and never have to disclose that they aren't working in your best interest. President Obama and Senator Warren believe the solution is to have the Department of Labor issue new rules saying that brokers, too, must work in their clients' best interest.5

But the new rules could cost Wall Street a lot of money – and Republicans are rising to its defense. Senate Republicans have offered up a host of delaying tactics, and Rep. Ann Wagner (R-MO) sponsored a bill to block the block the Department of Labor from acting. A similar bill won the votes of nearly 30 Democrats in the House in years past before being blocked in the Senate.6,7 Even though these unethical brokers are actually costing Americans money, the powerful financial services industry denies there is a problem and claims new rules will hurt consumers by putting brokers out of business – and Democrats may listen if we don't speak up.8 There's a real risk that senators on both sides of the aisle side with investment scam artists.

Tell Senate Democrats: Stop Wall Street retirement scams. Click here to sign the petition.

President Obama does not need Congress to act. The Department of Labor simply needs to update regulations governed by the Employee Retirement Income Security Act (ERISA), which was passed in 1974, before 401(k) plans even existed.9 In the past, the Labor Department has been forced to back down from such a change. But today, Labor Secretary Thomas Perez is championing the new rules – if Congress will let him.

Republicans are trying to block the change by shifting responsibility from the Department of Labor to the Securities and Exchange Commission (SEC). The two entities share responsibility for regulating retirement investments, but the SEC has long failed to act. Even though SEC Chairwoman Mary Jo White recently came out in favor of cracking down on brokers, Republicans are counting on the delays to continue or for any new rules to be weaker than those proposed by the Obama administration – pushing legislation demanding that the Labor Department follow the SEC's lead.10

If Senate Democrats buy Wall Street arguments that it is more important to protect brokers from two different sets of rules than it is to protect retirees from scams and dishonest dealers, it could cost Americans billions. We can't let that happen.

Tell Senate Democrats: Stop Wall Street retirement scams. Click below to sign the petition.

Thank you for your activism.

Murshed Zaheed, Deputy Political Director
CREDO Action from Working Assets

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  1. Bryce Cover, "How Wall Street Siphons Billions From Retirees — And Gets Away With It," ThinkProgress, February 23, 2015.
  2. Ibid.
  3. Joseph C. Peiffer, "Brokers should be required to live up to their TV ads," The Hill, March 27, 2015.
  4. Cover, "How Wall Street Siphons Billions From Retirees — And Gets Away With It."
  5. Ibid.
  6. Nick Thornton, "Republicans demand proof DOL worked with SEC on fiduciary rule," BenefitsPro, March 5, 2015.
  7. Mark Schoeff, "Republican introduces bill to halt Obama's DOL fiduciary push" InvestmentNews, February 25, 2015.
  8. Matthew Yglesias, "Obama's newest plan might drive investment advisers out of business. Good.", February 24, 2015.
  9. Danielle Kurtzleben, "The Obama administration has a plan to crack down on bad investment advice,", February 23, 2015.
  10. Schoeff, "Republican introduces bill to halt Obama's DOL fiduciary push."

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