Biden pledges to protect retirement savings and attacks unwanted fees

FILE – President Joe Biden speaks about the September jobs report in the Roosevelt Room of the White House, Friday, Oct. 6, 2023, in Washington. Biden on Saturday denounced the “horrific attack” by Hamas activists on Israel and said the United States was ready to provide support after the surprise attack that sparked global condemnation, anger and shock from Israel’s allies. Biden explained in a phone call with Israeli Prime Minister Benjamin Netanyahu, “We are ready to provide all appropriate means of support,” according to the White House. “To Israel. (AP Photo/Evan Vucci, File)

(NewsNation) – President Joe Biden on Tuesday spoke about retirement security for Americans, focusing on the “unwanted fees” charged by financial advisors.

So-called “junk fees” have been a focus of the Biden administration as the president seeks to reduce hidden costs for consumers. The President affirmed his commitment to building an economy from the “middle out and from the bottom up” with a focus on working families.

“If you come from a middle-class family, the thing that makes you angriest is when you get taken advantage of,” Biden said.

A revealed Proposed by the Ministry of Labor This requires financial advisors to work for the benefit of the account holders and not for the investment company. While a previous law passed in the 1970s covered financial advisors and their fiduciary duty to clients, the president noted that those laws, passed when pensions were popular and 401Ks did not exist, have not kept up with the times.

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Biden specifically pointed to annuities, which are purchased for a set amount and are intended to provide a fixed amount of money year after year during retirement. While annuities can be a good investment for consumers, Biden has pointed out that self-serving annuities that profit from brokers can drain people’s savings accounts and leave them with payments that are much lower than expected.

The president noted that bad financial advice can cost up to 1.2% of a retirement plan annually, an amount that doesn’t sound like very much but can amount to tens of thousands of dollars over time.

Under the new rule, financial advisers and brokers will be obligated to act in the best interests of their clients, not their own. This rule aims to fill loopholes in previous laws, and financial advisors who violate it will face penalties that may include the payment of compensation in addition to additional fines.

Biden noted that the rule, which has not yet been finalized, would benefit both consumers and honest financial advisors who face unfair competition from less honorable brokers.

Previously, the president has focused on fees charged by travel companies, ticket sellers, rental companies, banks and other businesses that consumers don’t know about when they decide to make a purchase. He specifically highlighted his efforts to eliminate fees for basic banking services, such as checking a bank account balance or accessing old financial records.

Biden described his campaign against unwanted fees as an issue of fairness, noting that consumers should be able to see the price they will be charged for an item or service upfront rather than be surprised by hidden fees at checkout and that honest businesses shouldn’t be. Undercut by competitors who have hidden fees.

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Biden concluded his speech by saying: “Every American who is willing to work hard should be able to achieve the American dream.”

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