COBRA’s Mother Takes on Wall Street in Fight Over 401(k)s

By Robert Schmidt Jun 18, 2014 6:00 AM ET

Phyllis Borzi spent decades helping invent ways to protect people from unpleasant surprises in their health and retirement plans. Never did she run into the kind of resistance finance firms have mustered against her latest idea. ... And 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
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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.
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The story of Borzi’s quest shows how one individual in the government can drive a policy forward by dint of her own will and conviction. Yet her failure thus far is a lesson in what happens when that idea collides with longstanding business practices that involve trillions of dollars.