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Statement From Investment Program Association on Department of Labor's Proposed "Fiduciary" Redefinition

ELLICOTT CITY, Md., Feb. 23, 2015 (GLOBE NEWSWIRE) -- The Department of Labor today indicated that it would submit to the Office Of Management and Budget (OMB) proposed changes in the definition of the "fiduciary" for purposes of the Employee Retirement Income Security Act (ERISA). The IPA does not believe this will benefit investors.

"The effects of this proposed rule could cause significant unintended harm to the very investors it aims to protect," said Kevin M. Hogan, President and CEO of the IPA. "If the rule is adopted, we're concerned that middle-income investors and holders of smaller IRAs could be turned away from the professional retirement advice they need."

The Investment Program Association (IPA) is strongly in favor of investor protection, as evidenced by our work over the past three years with the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) to create a new account statement rule for non-listed REIT securities.

With an estimated 10,000 Americans turning 65 daily, this proposed rule could significantly restrain access to thoughtful retirement planning for millions of Americans who need it.

Specifically, the IPA notes that:

  • Because of the size of their accounts, it's unlikely that many of the 19 million account holders and participants would be able to receive services and advice from investment professionals as part of a brokerage relationship.
  • Brokerage IRA investors forced into an advisory model would face significant cost increases.
  • Independent brokerages that have been the engine of financial well-being for millions of Americans could go out of business or be harmed from the loss of commission revenues.
  • Fewer IRA savings accounts would likely be opened.
  • The cost would simply discourage retirement savings.

About The Investment Program Association

The Investment Program Association (IPA) was formed in 1985 to provide effective national leadership for the direct investment industry. The IPA supports individual investor access to a variety of asset classes not correlated to the traded markets and historically available only to institutional investors. These include public non-listed REITs (NL REITs), business development companies (BDCs), energy and equipment leasing programs, and private equity offerings. For 30 years the IPA has successfully championed the growth and improvement of such products, which have increased in popularity with financial professionals and investors alike. Direct investments are held in the accounts of more than 2 million individual investors, and the IPA's member companies operate or have properties in all 50 states. Today these investment products function as a critical component of effectively diversified investment portfolios and serve an essential capital formation function for the US economy. The mission of the IPA is advocating direct investments through education. Access the wealth of IPA educational materials here, or visit the IPA online for more information about becoming a member.

To stay up-to-date with IPA news, follow @IPADirectInvest on Twitter.

CONTACT: MEDIA CONTACT: John McInerney Makovsky 212.508.9628 jmcinerney@makovsky.com

Source:Investment Program Association