Labor Department Considering New Safeguards to Protect Retirees

Photo of Eric Gerard

The U.S. Department of Labor is considering new rules to protect retiree-investors by cracking down on arrant investment brokers. The rules would help ensure that retired investors, many of whom rely on their retirement investment accounts to provide for them in old age, are not taken advantage of by brokers harboring undisclosed conflicts of interest. Under the proposed rules, the brokers would be required by law to do what commonsense and basic scruples should dictate anyway: act in the best interest of the retirees who give them their money to invest.

The phrase "fiduciary duty" appears in various areas of the law where one acts at the behest of another. It is founded on concepts of trust, responsibility, and often vulnerability. Most basically, the phrase means that the person to whom power or property is entrusted - the "fiduciary" - must place the interests of the person from whom it is received above even his or her own.

In the context of investing, it means that the broker or advisor to whom the investor turns for guidance must act solely in the best interests of the investor. The reason for this principle is that the broker or advisor is in a position of power, as he or she usually possesses vastly greater knowledge and sophistication as to today's complex financial markets.

Currently, however, only registered investment advisers are deemed to owe this duty to their investors. Yet oftentimes retirees rolling over retirement savings accounts like the 401(k) from their employers into individual accounts end up working with brokers who do not fall into that category. Instead, the brokers may recommend investments that, unbeknownst to the investors, the brokers are earning a hefty commission off of and prioritizing their own compensation over the propriety of the investments they are recommending. As a result, many retirees whose continued financial health depends on the proper investment of savings they have worked their whole lives to build are pouring money into funds and vehicles not suited to their investment needs, thereby exposing themselves to potential ruin.

To tackle this problem, the Labor Department has proposed new rules to update the Employee Retirement Income Security Act, or Erisa, to apply the fiduciary duty standard more broadly. Any professional being compensated for providing investment advice would be subject to the higher standard under the proposed changes, helping to ensure that retirees receive good investing advice and that conflicts of interests are fully disclosed. (You can read more about the proposed rule changes here)

The lawyers at Abraham, Watkins, Nichols, Sorrels, Agosto & Friend have been fighting to protect everyday Texans of all stripes for over 65 years in cases involving catastrophic injury, commercial malfeasance, and investor fraud. If you or someone you know has been hurt by the wrongdoing of another, contact us at 713-222-7211 or toll free at 1-800-870-9584.

No Comments

Leave a comment
Comment Information

Awards & Recognition

  • 2016-2017 Equal Access to Justice Champion

    The Equal Access to Justice Champions Program was started by the Houston Bar Association in 2006, to help ensure placement of Houston Volunteer Lawyers cases with pro bono volunteers. Originally, firms were tiered according to size, and firms within each tier committed to accept a certain number of pro bono cases from HVL each year for five years.

  • The National Trial Lawyers | Top 100 Trial Lawyers

    The National Trial Lawyers: Top 100 is an invitation-only organization composed of the premier trial lawyers from each state or region who meet stringent qualifications as civil plaintiff and/or criminal defense trial lawyers. Selection is based on a thorough multi-phase objective and uniformly applied process which includes peer nominations combined with third-party research.

  • Million Dollar Advocates Forum

    Established in 1993, the Million Dollar Advocates Forum (which includes the Multi-Million Dollar Advocates Forum) is one of the most prestigious groups of trial lawyers in the United States. Membership is limited to attorneys who have won million and multi-million dollar verdicts and settlements. There are over 4000 members throughout the country. Fewer than 1% of U.S. lawyers are members.

  • Recognized by Best Lawyers America | Abraham, Watkins, Nichols, Sorrels, Agosto & Aziz | 2017

    Recognition by Best Lawyers is based entirely on peer review. Their methodology is designed to capture, as accurately as possible, the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area.

  • Lead Counsel Rated

    In order to earn the Lead Counsel Rating, an attorney must not only demonstrate significant legal experience, but must also receive multiple peer recommendations advocating his or her ability. This is a key component in the screening process.

  • Texas Super Lawyers | Texas Monthly

    Each year, Super Lawyers recognizes the top lawyers in Texas via a patented multiphase selection process involving peer nomination, independent research and peer evaluation. The Texas lawyers who receive the highest point totals during this selection process are further recognized in Texas Super Lawyers Top Lists.

Get Your Free Case Review 713.587.9668

Let Us Help You Today! Request a Free Consultation

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

  • $50+ Million Personal Injury Fire and Explosion

    The firm successfully represented nearly 100 victims who suffered personal injuries and damages to property from a large fire and explosion resulting in a settlement of more than $50 million. The firm served as lead lawyers on the steering committee in this litigation.

  • $80 Million Personal Injury Large Plant Explosion

    The firm successfully represented 270 plaintiffs', taking a lead role in the plaintiffs' steering committee, who suffered injuries in a large plant explosion resulting in a settlement of nearly $80 million.

  • $50+ Million Personal Injury Plant Fire and Explosion

    The firm successfully represented 45 personal injury victims in a plant fire and explosion, serving on the plaintiffs' steering committee, concluding with a settlement of more than $50 million.

  • $22+ Million Personal Injury Work Site Accident

    The firm prevailed in a personal injury trial for a worksite injury client with the jury returning a verdict and resulting in a judgment of over $22 million for the firm's client.

  • $12 Million Auto Accident 18-Wheeler Collision

    The firm successfully achieved a $12 million settlement for the family of a man who died in an 18 wheeler collision.

  • $30 Million Personal Injury Burn Victims

    The firm prevailed on behalf of three burn victims with settlements totaling nearly $30 million.

Our Record Of Success.

When you are hurt and you choose a law firm to represent you in court or at the negotiation table, you need to carefully consider the firm's record.

More Success Stories