In the first quarter of 2015, we have seen the Obama administration be serious about cracking down on backdoor payments and hidden fees that several Wall Street firms allegedly benefit from. The firms are said to be selling investments with “high costs and low returns†rather than sharing quality investment advice. (Read: White House Warns of Backdoor Payments for Retirement Investments)
Now, the Labor Department has announced a proposal, which would require brokers to have a legal duty to prioritize clients’ interests. The protection is believed will save $40 billion in fees over 10 years. According to the Bloomberg, “Brokers could earn sales commissions and other fees that create conflicts of interest if they sign a “best-interest†contract with investors,†said Labor Secretary Thomas Perez.
