STATEMENT: The SEC’s New Regulation Best Interest Rule a ‘Setback for Working Families’

Washington, D.C. — Today, the U.S. Securities and Exchange Commission (SEC) voted to adopt Regulation Best Interest and new changes to standards of conduct for investment advisers. These new provisions are portrayed as protecting vulnerable investors in their dealings with investment advisers and brokers and replace the U.S. Department of Labor (DOL) conflict of interest rule that the Obama administration completed in 2016.

Following the vote, Andy Green, managing director of Economic Policy at the Center for American Progress, issued the following statement:

These new rules are a big setback for working families. Many parts of the retirement industry are built around extracting high fees, often with significant conflicts of interest. The previous White House Council of Economic Advisers showed that these conflicts of interest cost individual retirement account savers alone at least $17 billion every year—knocking 25 percent or more off the returns to hard-working savers over a 35-year period.

The DOL’s conflict of interest rule took on these issues with a strong and effective mandate to act in the investors’ best interests and eliminate conflicts of interest, and it included strong enforcement mechanisms for those who were wronged. But the Trump administration let this rule die after the U.S. Court of Appeals for the Fifth Circuit made a wrongly decided ruling to strike it down. While President Trump’s SEC Chair Jay Clayton promised to address this gap and advance a reasonable approach on behalf of investors, neither the SEC’s proposal nor its final rules meet Clayton’s own goals—or the direction to act embedded in the Dodd-Frank Act. Indeed, the SEC is actually making the situation worse.

The SEC is portraying its rules as requiring brokers to act in the so-called best interests of their client. But as SEC Commissioner Robert J. Jackson Jr. indicated this morning, the SEC has done the worst of all worlds—locking in a  lowering of standards for everyone. This is a betrayal of those who called for the SEC to be at the table in addressing the serious issue of retirement security for working families.

This isn’t half a loaf—it’s a failure and an affront. The SEC can and must revisit this issue and do better.

For more information or to speak to an expert, contact Julia Cusick at or 202-495-3682.