Statement of US Labor Secretary Perez on legal challenge to department’s efforts to ensure best interest retirement advice

WASHINGTON – U.S. Secretary of Labor Thomas E. Perez today issued the following statement regarding a lawsuit filed to stop the department from ensuring that retirement savers receive investment advice that is in their best interests.

“People saving for retirement have a legal right and a compelling economic need to receive retirement investment advice that is in their best interest. Today, a handful of industry groups and lobbyists are suing for the right to put their own financial self-interests ahead of the best interests of their customers.

“Conflicted advice is eroding the savings of working Americans to the tune of $17 billion each year. The Conflict of Interest rule aims to address that problem by requiring retirement advisors to look out for the best interests of their clients. Many financial services professionals, from small town advisers to some of the nation’s largest firms, engaged constructively with the department throughout the rulemaking process and, after publication of the final rule, noted that they do put the interests of their clients first and are well positioned to comply. They recognize that putting their customers first is good for business.

“But there is a small, vocal minority who support the status quo that enables them to put their own interests first. This lawsuit seeks to vindicate their desire to put their own interests ahead of their clients’ best interests.

“This rulemaking was one of the most deliberate, open regulatory processes in recent memory. We had countless meetings and conversations with industry and stakeholders, considered thousands of comments from the public, held several days of public hearings and coordinated with our fellow federal agencies over the course of more than five years. We heard what stakeholders had to say, thoughtfully considered their comments and made improvements to the rule based on their feedback.

The department’s Conflict of Interest rule is built upon solid statutory and legal foundations, and we will defend it vigorously.”