Saving for retirement? Under new federal rules, fewer experts will be able to advise you

When it comes to navigating your 401(k), who do you turn to? Many companies offer a toll-free number to speak with a customer service rep, often located offshore. Or they will direct you to manage everything online. These options may not be ideal when you have specific questions. In such cases, most people turn to their trusted financial adviser, a crucial figure in the retirement planning process.

While Iowans are pretty self-sufficient, not everyone likes "DIY finance." Watching a home renovation show and then painting your kitchen or replacing your dishwasher is one thing. Turning your 401(k) savings into a lifetime paycheck in retirement is quite a bit different. And there is much more riding on the outcome, so much so that the federal government has arbitrarily determined that you need a "fiduciary" to help you.

Why is this happening? Congress tasks the Department of Labor with overseeing ERISA plans. For those who don't speak financial jargon, ERISA plans are employer-sponsored health and retirement plans such as a 401(k) plans.

Since money currently in Individual Retirement Accounts (IRAs) was often rolled over from a 401(k), the DOL naturally thinks those accounts must be monitored by them alone and not the Financial Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC), and the Iowa Insurance Division (IID). Those three groups have been consumer watchdogs for IRAs for 50 years and are well-versed in enforcing the rules.

As a member of the non-partisan NAIFA (National Association of Insurance and Financial Advisors), 20 of my fellow Iowa colleagues and I traveled to Washington, D.C. in May to have this very discussion with both Sens. Chuck Grassley and Joni Ernst, as well as our members of Congress: Reps. Ashley Hinson, Mariannette Miller-Meeks, Zach Nunn, and Randy Feenstra.

Fortunately, they also understand the problem. Most Congress members from both sides of the aisle do. Sen. Ernst has even taken a leadership role in this fight to rein in duplicative oversight by requesting that acting DOL Secretary Julie Su rescind the implementation of the Department’s new Investment Advice Fiduciary Rule, scheduled to take effect on September 23.

A federal court has already struck down the Department of Labor’s overreach on fiduciary matters once before. To further that point, on June 28, the U.S. Supreme Court struck down their own Chevron Deference ruling, which limits the ability of administrative states to make and enforce rules arbitrarily. Laws are to be passed by Congress, not unelected bureaucrats.

Being a fiduciary can be a good thing. But, like anything, too much of a good thing can be bad. When consumers need help, there will be fewer people to help them.

Why? Many financial advisers and insurance agents cannot serve as fiduciaries as they are employees of a specific company. So, they have limitations on the products and services they can provide. Their clients are still getting help and advice, but they get it under a rule called the Best Interest Standard. Like any business person with common sense, they want to do what's in their client's best interest so that the client will do business with them again and hopefully refer their family, friends, and co-workers to them when they need advice or service.

Many critics of the Best Interest Standard do not understand that not all Americans need or want a fiduciary to help them with their finances. These same critics (including the DOL) also don't understand that not every financial transaction requires ongoing advice or monitoring.

In many cases, having a fiduciary is going overboard. Do you need an ASE-certified mechanic to change your wiper blades or pump your gas? It's unnecessary and would cost a lot more money. Did you know many fiduciaries require million-dollar account minimums before they even talk to a retiree? If the DOL will only allow a fiduciary to help people with their IRAs, what does an Iowan do if they only have $100,000? Or $400,000? Go online and possibly get scammed? Or hang up the phone in disgust because the person trying to help them doesn't understand English?

We already have a system of rules and laws in place. Adding more rules — especially unnecessary ones — doesn't help Iowans retire safely and securely. Past performance isn't a guarantee of future results, with more government, it truly is. More rules always mean higher costs and fewer choices for consumers — in Iowa and all across the United States.

The Department of Labor may have good intentions. But America's retirees already have hardworking, well-intentioned local financial advisers and agents helping them on Main Street, where a good reputation still rules.

Craig Adamson is an independent financial adviser in Marion. He currently serves on the NAIFA Iowa state board as the Advocacy co-chair and is president-elect for 2025.