Home Viewpoints

TOPICS
401(k)
Bond Fund
Bonds
COVID-19
Commodity Investments
Corporate Bonds
Cybersecurity
Equity Fund
Equity Investing
Europe
Events
Exchange-Traded Funds
Federal Reserve
Financial Markets
Financial Stability
Fixed Income
Fund Governance
Fund Regulation
GMM
Global
Government Affairs
ICI Global
IDC
IRA
Index Fund
Interest Rate
International
Investment Education
Investor Research
Money Market Funds
Mutual Fund
Operations and Technology
Policy Research
Proxy Voting
Retirement Policy
Retirement Research
Savings
Shareholder
Target Date Funds
Taxes
Trading
Treasury
ARCHIVE
On Fiduciary Rule, New York Times Relies on Fatally Flawed Research
By Paul Schott Stevens
April 8, 2015
Today I submitted the following letter to the editor of the New York Times:
To the editor:
The White House research you cite in “Successful Investing for the Long Haul” (editorial, April 8) is fatally flawed, and the claim that retirement savers pay “billions of dollars a year” in excess costs does not stand up to the facts.
The White House’s “billions of dollars” rhetoric is based on an assumption that investors in individual retirement accounts (IRAs) pay fees that are more than 1 percentage point higher than the fees paid by 401(k) investors. In fact, the actual difference in fees between stock mutual funds held in IRAs and those in 401(k) plans is 0.16 percentage point—a fraction of the White House claim.
Further, none of the academic studies that the White House cites actually addresses the relevant question—the costs of investing with a fiduciary adviser versus the costs of using a broker or non-fiduciary. Indeed, none of the studies even identifies whether investors are advised by fiduciary or non-fiduciary advisers. The studies do not support the White House’s conclusions of harm to investors.
Paul Schott Stevens
President and CEO
Investment Company Institute
Washington, DC
We will continue to advocate vigorously to ensure that the Department of Labor does not implement a fiduciary definition so broad that it effectively prohibits firms from providing investment-related information and guidance to America’s retirement savers.
Paul Schott Stevens is President and CEO of ICI.
TOPICS: 401(k)Fund RegulationInvestment EducationRetirement PolicySavingsShareholder
Copyright © 2021 by the Investment Company Institute