Released: August 22, 2017

Consumer Action guides consumers to avoid investing costs, pitfalls

Contact: Ruth Susswein (301) 718-2511, Linda Sherry (202) 544-3088

Resource helps consumers avoid pitfalls as administration’s attacks on investor protections ramp up

Washington, DC - As the Trump administration reverses recent advancements in investor protections and savings initiatives, the national consumer advocacy non-profit Consumer Action has dedicated the latest issue of its quarterly newsletter, Consumer Action News, to helping consumers avoid excessive or unnecessary costs when choosing among investment products and professionals.

The investor’s guide includes straightforward advice on the benefits and hazards of common investments, from mutual funds to life insurance; how to vet financial advisers, brokers and investment firms; and what to know to avoid getting ripped off by excessive fees and unscrupulous business practices. 

The Investment Basics issue of Consumer Action News also provides an overview of how the changing political landscape is impacting consumer protections with regard to investing and saving for the future.

“Our new, easy-to-understand guide, which will help consumers avoid falling victim to harmful investment products, is more important now than ever given the efforts of the current administration—and many in Congress—to deregulate the financial industry and leave consumers vulnerable to predatory practices,” said Linda Sherry, Consumer Action’s director of national priorities.

In 2016, the U. S. Department of Labor issued a new fiduciary rule to eliminate conflicts of interest existing when financial advisers give advice that profits them over their clients. The rule requires advisers to put the accountholder’s best interests first when offering investment advice about retirement funds; however, the Trump administration delayed implementation of the rule, which was set to go into effect April 2017. The future of the rule is now uncertain.

Late last month, the U.S. Treasury Department also announced the closure of the government-sponsored retirement savings program myRA. The four-year old Roth IRA-style program served as a starter account for low- and middle-income earners without an employer-sponsored retirement savings option (e.g., restaurant and retail employees). The program charged no fees, had no minimum balance requirement, allowed payroll deduction, and paid a modest—but guaranteed—interest rate.

“Unfortunately, the myRA program, which could have helped countless non-saving households start a savings habit, was also gutted by the current administration,” Sherry added.

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Through multilingual consumer education materials, community outreach and issue-focused advocacy, Consumer Action empowers underrepresented consumers nationwide to assert their rights in the marketplace and financially prosper.