Posted on 02/23/2015 9:43:22 AM PST by Olog-hai
The Obama administration is proposing tougher restrictions on brokers who manage Americans’ retirement accounts, reigniting a confrontation with the financial services industry over rules affecting trillions of dollars in 401K and other savings accounts.
The change would put brokers—who sell stocks, bonds, annuities and other investments—under the stricter requirements for registered financial advisers when they handle clients’ retirement accounts.
In a long-anticipated move, the Labor Department is making the proposal Monday to the White House Budget Office. After an internal review, it likely will be put out for public comment for several months. Obama was scheduled to address the AARP later Monday to draw attention to the plan.
The rule has been the subject of intense behind-the-scenes lobbying, pitting major Wall Street firms and financial industry groups against a coalition of labor, consumer groups and retiree advocates such as the AARP. …
(Excerpt) Read more at hosted.ap.org ...
Sure, and often trade against their clients, but for their own financial interest.
Google “Theresa Ghilarducci” and the game will become clear.
Or convince their clients to use their tax deferred accounts to buy a high-commission tax deferred insurance product or annuity that underperforms a low-cost index fund. I’ve even seen brokers use tax deferred retirement accounts to buy over-priced tax-free government bonds that the brokerage house has underwritten. There is no legitimate investment reason for any honest investment advisor to recommend tax free bonds within a tax deferred retirement account.
“I’m almost certain that this is to gain an additional governmental toe hold in 401(k) accounts...”
TIAA-CFEF just increased my IRA fees by 40%, while decreasing my State of Maryland 401 fees by 50%.
Buying influence or succumbing to government pressure? Individuals have no pull, but governments do. Managing an individual account must be cheaper than managing an account for an individual through a government agency with a lot of regulations on it.
I knew my company had a trustworthy broker for our 401(k) plan when I saw how much time he spent advising our employees what they should not be doing with their retirement savings. During the dot-com idiocy of the late 1990s he could have made a lot of money on commissions from people who saw their retirement accounts as a vehicle for day-trading.
I see someone in this administration has read Tony Robbins’ new book, “Money”.
Do I trust the Obama administration to do this right? No. I expect it's just a method of reshuffling the bribe deck so that the investment companies must hire new advisers on K Street for protection. But the investment companies are certainly not close to looking out for the workers.
A more recent job had the best option I've seen: each employee was given a Schwab account and had access to just about the full list of investments there at regular Schwab commissions.
This little gem comes later in the article:
“To buttress the new effort, the White House on Monday released a 30-page report from its Council of Economic Advisers noting that an estimated $1.7 trillion of individual retirement account assets are invested in products that pay fees or commissions that pose conflicts of interest.”
This carries the stench of Teresa Ghilarducci. She’s been involved in hearings to steal your retirement for years now.
“Some animals are more equal than others”
The next step is for him to nationalize everyone’s retirement money and inheritance.
...of course, the government elites will be exempt form this law that only applies to us peasants...just like the Obamacare laws...
I fear you are correct and many a fool will fall for it.
Again.
It wasn't illegal, but it most certainly was unethical.
So, I fired him. End of story.
The moral is that I can fire advisers that take advantage of me, but I can't fire government bureaucrats, who will take just as much (if not more) advantage of me. :-)
This is a horrific idea.
Related.
High-Court Spotlight Put on 401(k) Plans
Supreme Court to hear arguments in case that could have broad implications for the way people save for retirement
By Liz Moyer
Feb. 23, 2015 1:35 p.m. ET
The U.S. Supreme Court is scheduled to hear arguments Tuesday in a case that could have broad implications for the way millions of Americans save for retirement.
The court will focus on a narrow issue concerning the statute of limitations in the case, called Tibble v. Edison International . A ruling against Edison could trigger a wave of lawsuits against companies over the way they set up and manage 401(k) retirement accounts and similar plans, according to lawyers not involved with the case.
Tibble is one of 13 class-action lawsuits filed in the past eight years that have accused U.S. companies, including Boeing Co. and Massachusetts Mutual Life Insurance Co., of failing to act in the best interest of employees who participate in their 401(k) plans. The issues include failing to monitor excessive fees, favoring some high-cost retail mutual funds over lower-cost options and funneling employee savings into investment products managed by affiliate companies.
The case comes as the Obama administration is placing heightened scrutiny on retirement plans, the fees they charge and the potential for adviser conflicts.
snip
A 401(K) has administrators that have a fiduciary responsibility for the plan. They are the ones held responsible for the plan, not the brokers or investment managers they hire to work with.
Normally the employee contributes to his account also, and especially with that portion of their account they should be able to invest in whatever is available to them. The investment managers can give advice, but can’t tell them what they can do with their own money.
This all comes from the political elite thinking the common man just doesn’t know what’s good for him.
Bless you for doing that. At my last job, I couldn't believe that the 401k offered a 500 index charging somewhere north of 2%. Nearly criminal, that. More than 20X what I'm paying, elsewhere.
When I discussed this with our 401K administrator, I was informed that he couldn't get rid of it, because "It was the most popular option". I figure that either he was getting kickbacks, or there were an awful lot of dumb people working at that company. Or, it could easily have been both. :-)
Good investment advice is hard to find.
“Why do you rob banks?”
“Because that’s where the money is”
I read perfectly well. The point is, that Libprogs by their very nature are compelled to mess around with things that are not problems.
Perhaps you should read more closely yourself, and learn to recognize sarcasm when you see it. . .
Association for
Advancing
Radical
Progressivism
Thanks AARP. Obamacare is the best evah’
Heads up
birds of a feather...
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