you tell me if this is a good Idea ....

[billyerock1991]

The Labor Department proposal, known as the “fiduciary rule,” would change the ethical standards by which employer-based retirement products like 401(k)’s and IRAs are marketed and sold. The rule has not been updated since 1975, before 401(k)’s and IRAs even existed. The Labor Department wants to broaden the definition of a “fiduciary” to cover all financial advisers who offer individual investment advice for a fee. Under the rule, they would be legally required to work in the best interest of their clients. For example, a fiduciary would not be able to push investment products on customers in which they have a financial stake. The agency defines the goal of the proposal as “to ensure that potential conflicts of interest among advisers are not allowed to compromise the quality of investment advice that millions of American workers rely on, so they can retire with the dignity that they have worked hard to achieve.”

...

Currently, it is depressingly common for financial advisers, more than 80 percent of whom are not fiduciaries, to self-deal when offering advice. First off, they obtain large fees from the retirement products they sell. According to the think tank Demos, a median-income, two-earner household will pay $155,000 during their lifetime to financial advisers on average. (The lifetime gains for two-earner households from retirement accounts are around $230,000, meaning that nearly two-thirds of the profits go to the industry.) Second, non-fiduciary financial advisers can enjoy kickbacks; right now there is no rule against an adviser from a mutual fund company encouraging clients to put their money in specific funds sold by that company. In fact, that’s the norm, and the adviser typically receives a commission for the sale.

Conflicts of interest like this cost retirement investors at least $1 billion a month, because the funds they get channeled into underperform the alternatives. Financial advisers also encourage rollovers into high-cost IRAs when an individual changes jobs. None of these schemes have to be disclosed to the customer, under the current standard. The National Bureau for Economic Research found in a recent study that “adviser self‐interest plays an important role in generating advice that is not in the best interest of the clients.”

So in the middle of a retirement crisis, when the majority of Americans already aren’t accumulating the savings they need to maintain their standard of living, sellers of retirement products are skimming close to $60 billion a year off the top through deceptive practices, making a bad situation even worse.

 

[Mr. H.]

Sounds good to me.

 

[Mad_Cabbie]

Labor Department Fiduciary Rule: Congress Votes to Thwart It | New Republic

I included this link, not sure who ran the original, it's a good article.

Sadly, the industry’s logic has captured the hearts of Congress. The vote in the Financial Services Committee for H.R. 2374 was 44-13, with lots of House Democrats in favor. Ten Senate Democrats have urged a delay in the Labor Department’s fiduciary rule as well. The Wall Street wing of the Democratic Party is perfectly comfortable with allowing the financial services industry to prey on trillions of dollars in 401(k) plans and IRAs.

Like the defense industry, financial advisers are sprinkled throughout the country; every member of Congress has several in their district. So it’s difficult to shut down the retirement swindle: That would mean challenging a powerful industry that can deliver campaign contributions and lay claim to local jobs.

More importantly, members of Congress are falsely swayed by the plea from the industry that 401(k) and IRA plans are the only recourse for Americans to have a decent retirement. First of all, stock-based retirement plans have failed; Americans are much better off with a defined-benefit pension than a product whose value shifts with the vicissitudes of the market. Ask anyone who retired during the stock crash of 2008 if they felt lucky to have a 401(k) to fall back on. Second, the retirement problem doesn’t automatically require a Wall Street solution. The idea that people have to tolerate conflicted advice in order to save for retirement is ludicrous. The retirement crisis is a function of 30 years of stagnant wages and an erosion of what was a secure “three-legged” retirement stool, consisting of pensions, private savings, and Social Security. With pensions being ravaged if not eliminated, and saving rates approaching zero, the only recourse to allow seniors to retire with dignity is to significantly expand Social Security, a fact that has finally attracted major support among liberals. Tax benefits on 401(k) and retirement plans cost the government hundreds of billions of dollars every year: People would benefit more from simply getting a bigger universal payout in retirement.

The very least we can do, if we keep the current flawed system, is create a standard so that the advice millions of Americans get on their retirement money does not come from anyone looking to bilk them.

 

[Pennywise]

On the surface it sounds good, but I would need to see the Devil's details considering how corrupt the US government is. I wouldn't take their word for it if they proclaimed that the sun rises in the east.

The road to hell is paved with the bones of rubes.

 

[Mad_Cabbie]

On the surface it sounds good, but I would need to see the Devil's details considering how corrupt the US government is. I wouldn't take their word for it if they proclaimed that the sun rises in the east.

The road to hell is paved with the bones of rubes.

So doing nothing is the way to go?

 

[Pennywise]

On the surface it sounds good, but I would need to see the Devil's details considering how corrupt the US government is. I wouldn't take their word for it if they proclaimed that the sun rises in the east.

The road to hell is paved with the bones of rubes.

So doing nothing is the way to go?

I didn't say that, I said I would need to see the details of the possible legislation. But it is true, sometimes doing nothing is the better choice.

 

[billyerock1991]

On the surface it sounds good, but I would need to see the Devil's details considering how corrupt the US government is. I wouldn't take their word for it if they proclaimed that the sun rises in the east.

The road to hell is paved with the bones of rubes.

So doing nothing is the way to go?

I didn't say that, I said I would need to see the details of the possible legislation. But it is true, sometimes doing nothing is the better choice.

here are the details you asked for you tell me if this is a good idea

Republicans and conservative Democrats just voted to sell you out to Wall Street. In other words, it's Tuesday.

Today, the House passed the so-called Retail Investor Protection Act 254 to 166. 30 Democrats voted with 224 Republicans in favor. 165 Democrats--and one Republican--voted against it. Those following H.R. 2374 thought it would pass with wide bipartisan margins, so having 165 Democratic NAY's was better than expected. The 30 Democratic YEA's still need to be named and shamed, however.

First, let's begin with the important question: What is the Retail Investor Protection Act? The bill delays a new Department of Labor rule that would prevent financial advisers from stealing from your 401(K) plans or IRAs. Allowing financial advisers to rip you off is a great complement to that other plank in the Republican-Conservadem retirement insecurity platform, cutting Social Security.

BY DAVID DAYEN
Just because the government has shut down doesn’t mean Congress will cease its central function of making Americans’ lives miserable. While everyone watches the legislative back-and-forth on the budget, the House may vote this week to thwart a key new Labor Department protection affecting $10.5 trillion in retirement funds. Basically, House Republicans want to allow the financial services industry to continue to steal from your 401(k) and IRA plans. And far too many Democrats want to help them.

The Labor Department proposal, known as the “fiduciary rule,” would change the ethical standards by which employer-based retirement products like 401(k)’s and IRAs are marketed and sold. The rule has not been updated since 1975, before 401(k)’s and IRAs even existed. The Labor Department wants to broaden the definition of a “fiduciary” to cover all financial advisers who offer individual investment advice for a fee. Under the rule, they would be legally required to work in the best interest of their clients. For example, a fiduciary would not be able to push investment products on customers in which they have a financial stake. The agency defines the goal of the proposal as “to ensure that potential conflicts of interest among advisers are not allowed to compromise the quality of investment advice that millions of American workers rely on, so they can retire with the dignity that they have worked hard to achieve.”



Copyright. Link Each "Copy & Paste" to It's Source. Only paste a small to medium section of the material. Labor Department Fiduciary Rule: Congress Votes to Thwart It | New Republic

 

[billyerock1991]

the republicans supported this bill ... thank goodness the senate and the president didn't thats all we need more money being taken from our retirement accounts ... they did it to us with social security by putting it in the general fund ... what next "the republican greedy fund"...

 

[Mac1958]

.

Ho boy. I'm not gonna get too deep into this - not worth the time it would take to give the full picture - but a few notes on the terribly simplistic and shallow "points" this one-sided article makes:

As a financial advisor, I'm not a fiduciary (essentially meaning that I always have to work in the client's best interests). That's not because I'm a sleazy criminal, as some would have you believe, it's because that's the structure of most contracts under which advisors work. My broker-dealer is the fiduciary, and they are extremely strict on regulations, because it's officially their ass on the line.

Funny, I don't see an explanation of that in the piece. Maybe they forgot.

And there's really no way to describe how strict they are; suffice it to say that every word I type in an email is subject to review at any time; I literally cannot say or post anything in public that has not been reviewed and approved (which is why I don't even mess with stuff like LinkedIn), and the paperwork a client must read and sign is now approaching the bulk of a new mortgage loan.

So any implication that there is no fiduciary in the advisory process is either (1) negligent ignorance on the part of the "reporter" or (2) a lie. Every move we make is watched like a hawk.

One new law I'd like to see is one that requires 401K providers to provide FAR better education on their plans and how to invest. I've run into about a zillion 401K owners who had absolutely no idea what funds they were in or why; many who were in completely inappropriate funds and/or portfolios, etc. etc.

Hell, I provide regular education and training for all my 401K people, they're quite happy and I've gotten a ton of new business via referrals and from other monies those people had to invest. It ain't rocket science, but I can see that a strict law on ongoing education would be very helpful.

By the way, with all the plans I run, I don't receive "large fees" for pushing one plan or the other. I receive a small, fractional percentage of the value of the total assets in each account at the end of each quarter. And I always have to be sure that the plan I'm using is as low-cost as possible, so that I'm not undercut by another advisor, they are knocking on the doors of these businesses every freakin' day. You never know. For those who love only the government, that's called "competition".

Another positive development has been the proliferation of "target date" (they have many names) funds, which become more conservative as you inch closer to retirement. Set it and forget it, they're worked pretty well.

I could go on forever. But what I'm seeing in this article is just more simplistic "us vs. the greedy guys" crap that is neither accurate nor helpful. Some investors want to do it themselves; others want guidance and are willing to pay for it. The inference running through this thing is that the reason your 401K hasn't performed well enough (whatever that might mean) is that your evil financial advisor is stealing all your money. Of course. I assume the ultimate goal of this publication, as usual, is to have the government run everyone's retirement plans. Gosh, what a shock.

Yuck, I'll just stop there.

.

 

[mudwhistle]

Yes, let's let the Dems screw up our private retirement accounts too now.

They've been drooling over them for decades. Just waiting to take them away.

 

[Mac1958]

Yes, let's let the Dems screw up our private retirement accounts too now.

They've been drooling over them for decades. Just waiting to take them away.

I'm not one for conspiracy theories, but yeah, I'm pretty sure you're right.

.

 

[mudwhistle]

Yes, let's let the Dems screw up our private retirement accounts too now.

They've been drooling over them for decades. Just waiting to take them away.

I'm not one for conspiracy theories, but yeah, I'm pretty sure you're right.

.

Considering the simple fact that nothing they seem to deal with is done in a transparent manner I have suspicions about their motivations. Everything that Dems do these days is intended to screw us out of our earnings or to give them more power. It's clear they don't have our best interests in mind in much of anything. So when a lib starts talking about new regulations a red flag automatically goes up.

They've taken over private companies, health care, they're trying to take over the NFL. I suspect they want to take over our 401ks.

 

[Edgetho]

"Caveat Venditor"

Look it up, libturds. It's the principle under which the majority of 'Financial Advisers" are required to act.

libturds are such stupid fucks.

Question:

Do we really want the same geniuses running our Financial lives that just rolled out obamacare?

Not even the stupidest dimocrap should want that.

No...... wait

 

[editec]

BAsically they are TRYING to make these finacial advisors act ETHICALLY.

Sadly they will fail because the mindset of the finacial community now appears to be

NEVER GIVE A SUCKER AN EVEN BREAK

​

 

[mudwhistle]

BAsically they are TRYING to make these finacial advisors act ETHICALLY.

Sadly they will fail because the mindset of the finacial community now appears to be

NEVER GIVE A SUCKER AN EVEN BREAK

​

I think the Dems have ethical problems of their own.

Perhaps regulating Congress would be a better start.