On Monday, President Obama—with Senator Elizabeth Warren by his side—made a huge announcement: He called upon the Department of Labor to take steps that would protect millions of Americans by requiring financial advisers to act in the best interest of their clients. Will you sign the petition to make sure Congress doesn't stand in the way of this bold proposal?
I had the honor of representing millions of MoveOn members as President Obama spoke about this proposal. But we know that Wall Street, and its allies in Congress, will fight this tooth and nail. It's going to be a huge fight, but with President Obama, Sen. Warren, the AARP, and other organizations that push for financial reform backing this effort with us, we can win.
That's why we launched a petition to Congress, which says:
Every single year, an estimated $17 billion is transferred from Main Street retirement accounts into Wall Street's coffers—because brokers and financial advisers are allowed to steer investors into unethical investments that aren't in their own best interest.1
But the new rule proposed by President Obama—and championed by Sen. Warren—could change that.
As the White House explains:
A 1 percentage point lower return could reduce your savings by more than a quarter over 35 years. In other words, instead of a $10,000 retirement investment growing to more than $38,000 over that period after adjusting for inflation, it would be just over $27,500.2
And for a young person just starting out today and saving consistently—the numbers are staggering: A worker who saves $5,000 a year for 40 years could end up with over $224,000 more if Obama's new rule is implemented!3
There's reason to worry that Republicans in Congress will side with their Wall Street pals and try to undo this work. They could try to pass laws preventing the Department of Labor from issuing such rules, or could threaten the agency's funding to enforce these rules.
We need to make sure members of Congress hear from us: These rules make sense. Don't mess with them. Side with Main Street over Wall Street.
These types of rules sometimes fly under the radar. By signing and sharing this petition, we can make sure this important move gets the attention it deserves—and puts Congress on notice that we're paying attention.
Thanks for all you do.
–Ilya, Brian, Maria, Manny, and the rest of the team
1. "FACT SHEET: Middle Class Economics: Strengthening Retirement Security by Cracking Down on Backdoor Payments and Hidden Fees," The White House, February 23, 2015
3. According to the White House fact sheet, the average loss for investors who receive investment advice with conflicts of interest is 1% per year. If a worker deposits $5,000 each year for 40 years into a retirement account and never withdraws anything, the worker would retire with $773,809 at a 6% rate of return with conflicts of interest. But the worker would receive $998,176 with a 7% return without conflicts of interest. The 1% per year difference compounds to $224,367 over 40 years.
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