Bloomberg reports that Phyllis Borzi has spent decades helping invent ways to protect people from unpleasant surprises in their health and retirement plans. However, she has never run into the kind of resistance finance firms have mustered against her latest idea.
Conversely, Bloomberg notes that rarely has the industry met a bureaucrat so difficult to shut down.
Borzi, an assistant secretary at the U.S. Labor Department, has spent four years battling the full force of the financial lobby, interference from the White House and pressure from lawmakers of both parties over rules for individual retirement accounts and 401(k) plans.
She has long argued that people’s retirement savings can be eroded by high fees or imprudent investments recommended by advisers with hidden incentives. She is pushing for brokers to be held to a legal standard that they must act in a client’s best interest, an obligation known as a fiduciary duty.
Firms including Morgan Stanley and Fidelity Investments, which say the change would hurt, not help, small investors, appeared to have won the latest round last month. Yet neither side shows signs of backing away.
In speeches, Borzi invokes the movie Groundhog Day, in which events are relived over and over. Financial lobbyists see it as a game of Whac-A-Mole. No matter how many times they pound her down, Borzi keeps popping up.
“She does not pander to the industry,” said Barbara Roper, director of investor protection for the Consumer Federation of America, which backs Borzi’s effort.