Ryan Zinke Votes to Jeopardize Your Retirement—and Cost You Money Now

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Another press release you won’t see from Representative Zinke’s office this week, as the Congressman voted Thursday to overturn a Department of Labor rule that requires brokers to act in the best interest of their clients when dealing with retirement accounts. Zinke, joining all the Republicans in the House, voted to make it easier for brokers to push retirement savings into riskier investments. The Wall Street Journal explains the largely political vote:

The newly completed regulation, known as the fiduciary rule, requires brokers working on retirement accounts to act in the best interests of clients, a change that could transform the way financial products are sold and advice is given. Previously, brokers were required to give “suitable” guidance, a looser standard.

Changes like this seem arcane—and Republican efforts to spin the Obama Administration rule as “the Obamacare of Financial Services” obscure the simple truth that, before the rule was passed, a financial adviser could maximize her interest, rather than that of the client when steering investment choices. NPR provides an example that shows just how much someone could lose:

Say you need guidance on transferring money from an employer’s 401(k) plan to your own individual retirement account. If your adviser were operating under the old rules, he would only have to recommend a “suitable” investment, such as an annuity, with no regard for the size of the commission, which can range from 1 to 10 percent. Perez says the old rule meant that an adviser “can steer someone into a product that gives [the broker] a bigger commission at the expense of the customer’s return. That’s wrong.”

Investment decisions are incredibly complex, and the rule is designed to protect workers from large firms, who are more inclined to maximize profit than look out for the interests of small investors. It’s not unreasonable to expect that financial advisors should be required to give the best guidance to their clients. We’d certainly object to a standard that let doctors make medical decisions based on personal profit over patient health, and the rule Mr. Zinke just voted to revoke does just that for our economic health.

Scott Cooley, the Director of Policy Research at Morningstar, says that the Department of Labor already listened to the concerns of the financial sector when it adopted the rule, describing it as a “rule that will advance investor interests without imposing excessive costs on the financial-services industry—which, of course, would have passed on the costs to investors.” But that apparently wasn’t enough for Congressman Zinke and the giant financial firms he represents, who want to continue to scam people who simple want to have reasonable assurance that when they make investments in their retirement that they will be receiving advice that helps them build a secure future, not another garage for the investment banker to park another luxury car.

As Barret Naylor, a policy expert at Public Citizen, told NPR:

“Wall Street has argued that the hidden fees and commissions are necessary to serve lower-income investors. In effect, they’re saying, ‘If we can’t scam them a little, we’ll ignore them altogether.’ This deceptive mentality is exactly why a new rule is needed.”

The last time I checked, Congressman Zinke was elected to represent Montanans, many of whom depend on retirement investments, in Congress, not Wall Street or his party leadership. Perhaps he should consider starting to think about those people back home.

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About the author

Don Pogreba

Don Pogreba is an eighteen-year teacher of English, former debate coach, and loyal, if often sad, fan of the San Diego Padres and Portland Timbers. He spends far too many hours of his life working at school and on his small business, Big Sky Debate.

His work has appeared in Politico and Rewire.

In the past few years, travel has become a priority, whether it's a road trip to some little town in Montana or a museum of culture in Ísafjörður, Iceland.

10 Comments

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  • Why don’t you show a little integrity and include some information about how Jon Tester has been working against the fiduciary rule for years? His actions are as bad as Zinke’s, though they fly under democrats’ radar because… he is one of their own?

    http://missoulanews.bigskypress.com/missoula/money-matters/Content?oid=2577191

    “Tester voted for Dodd-Frank when it passed in 2010. The version of the bill for which he voted contained a provision that allowed the federal government to require financial advisors to prioritize their customers’ financial success ahead of their own—to sell the investment that fits the client, not the one that yields the biggest fee. Now that Labor is ready to implement that rule, however, Tester is against it.”

    • Here’s a simple explanation: I read the article from yesterday in the WSJ and researched the latest vote. Thanks for adding the additional information.

      Since we’re lecturing each other about integrity, how about not hiding attacks on someone’s integrity under a pseudonym? Just a thought.

      • A frequently cited 1995 Supreme Court ruling in McIntyre v. Ohio Elections Commission reads:

        “Anonymity is a shield from the tyranny of the majority. . . . It thus exemplifies the purpose behind the Bill of Rights and of the First Amendment in particular: to protect unpopular individuals from retaliation . . . at the hand of an intolerant society.”

        • Yeah. I think the Supreme Court had you in mind. I mean what courage it must take to post conservative opinion in a conservative state.

          There’s a difference between the critically important need to protect anonymous political speech and anonymous, childish, personal garbage.

          Have the courage of your convictions if you want to insult people. That’s all I ask.

  • Placing more importance of who said what versus what was actually said reminds me of pre war Germany’s often stated, “Your papers please”.

    Par for the course here though.

    “The Progressive believes in precisely two things: his own magnificence and the constructive power of brute force. In combination, they lead him naturally from the role of pestiferous busybody to brutal dictator. Where the productive man dreams of the things he might create if only left alone by his fellows, the Progressive dreams of the world he could create if only the lives and property of his fellows were at his disposal. The roots of his pathology lie in that oldest and most destructive of all human vices, the desire for the power to rule over other men.”-N.A. Halkides

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