Another day, another sector of society seemingly hoodwinked by the Regime. The auto industry, medical industry, energy industry, unions, you name the lobbying groups who donated HEAVILY to both of Obama’s election campaigns have ALL been backhanded by him.
Obama calls for tighter rules on retirement account brokers
Published February 23, 2015
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.
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.
The administration first proposed a regulation in 2010, but pulled it back following an industry outcry that the proposal would hurt rather than help investors by limiting choices.
To buttress the new effort, the White House on Monday is releasing a report from its Council of Economic Advisers that concludes investors lose billions of dollars because of brokers’ conflicts of interests. Obama was scheduled to address the AARP later Monday to draw attention to the plan.
“When you go to a doctor or a lawyer, you expect the advice you get to be in your best interests. But the same doesn’t always hold true in the world of retirement savings,” Labor Secretary Tom Perez said in a conference call with reporters. “Many financial advisers have taken an oath to serve your best interests, but there are other financial advisers and brokers who provide critical financial advice every day and are not obligated to look out for your best interests.”
Americans increasingly are seeking financial advice to help them navigate an array of options for retirement, college savings and more. Many people provide investment advice, but not all of them are required to disclose potential conflicts of interest.
Under current rules, brokers are required to recommend only “suitable” investments based on the client’s finances, age and how much risk is appropriate for him or her. The rules would make brokers handling retirement accounts obligated to put their clients’ interests first.
The chairman of Obama’s Council of Economic Advisers, Jason Furman, pointed to academic studies that conclude investors who receive investment recommendations potentially influenced by conflicts of interest sustain a 1 percentage point lower return on their retirement savings, totaling losses of $17 billion every year to middle-class families.
Industry officials dispute those studies and say the industry is well governed by financial regulators like the Securities and Exchange Commission. They say the Department of Labor is ill suited to write rules best left to agencies more familiar with the financial industry.
“You have the Department of Labor, which really doesn’t know this area,” said Ira Hammerman, general counsel for the Securities Industry and Financial Markets Association, the brokerage industry’s big lobbying group. “Our concern is they are not going to get it right, just like they did not get it right in 2010.”
Meanwhile, the SEC is studying the broader investment advice industry to determine whether it should come under further regulations. Critics of the Labor Department effort say the Obama administration should leave the regulations to the SEC or it will risk limiting the advice available to investors with relatively small retirement savings.
“Investors benefit from choice; choice of products, and choice in advice providers,” SEC Commissioner Daniel Gallagher, a critic of the Labor Department proposal, said in a speech Friday. “This is something the nanny state has a hard time comprehending.”
Perez and Jeff Zients, director of the White House National Economic Council, said administration officials have been consulting with SEC Chairman Mary Jo White, financial industry officials and consumer groups.
Zients said the proposed rule would be “very different” from the restrictions the administration proposed in 2010.
“Much has been learned since then,” he said.
” Much has been learned since then”. Translation: We at the Obama Regime do not need you assholes anymore. We got your money, and your votes. Now WE will do as WE damn well please”.
On first read, this all looked OK, as the investment industry, like ANY other, has it’s share of bad actors. So, in come the Regime’s “knights in shining armor, on their white horses”, and are going to “save the folks” from those EEEEVVVVIIIILLLL financial advisers who ONLY put PROFIT first.
And, right on cue, the media myrmidons run with it, while conviently forgetting Wall Street made HUGE donations, MORE than the media did, to get this chancre elected. NOT A PEEP about THAT from the leftist media.
What will NEVER see the light of day is THIS. Should this “proposal” become law, the “folks” will have FAR FEWER choices in WHO they turn to for their investment advice needs, and FAR FEWER available avenues in WHERE to put their investments. Needless to say, some investment products are simply NOT cut out for the retail investment business, such as options trading, short selling or buying, damn near ANYTHING to do with derivatives trading, and most speculative commodities markets.
While this proposal may or may not be the end result, what it tells ME is several things. One, the “geniuses” in the Regime think YOU are TOO STUPID to pick YOUR OWN investment advisor, two, the Regime, should this become law, is going to limit YOUR returns to around 5 to 8 %. THEN, they will TAX those “returns” at about 20 to 25 %.
Another little problem. Currently, according to Answers.com, there is approximately 6.86 TRILLION dollars sitting in the nation’s aggregate 401k and Roth IRA plans. Now if YOU are a committed socialist, THAT is simply TOO MUCH MONEY in the proletariats’ grubby paws. You think THAT money belongs to the GOVERNMENT.
I see this as a first step in the government, be it the Obama Regime, or one down the road to get THEIR grubby paws on this HUGE mountain of cash. After all, it IS what these political hacks live for, siphoning, then spending other peoples’ money. And since the government thinks WE,THE PEOPLE are too damn dumb to fend for ourselves, they see this stupidity , mostly from our educational system OBLITERATING damn near all economic education, as a way to claim THEY are just looking out for US, and “protecting” us from those EVIL profit seekers.
My friends, we have seen the economic prowess of this administration take us from a 7 trillion dollar deficit acculumated from the previous 43 presidents to a STAGGERING 18.135 TRILLION dollar defict TODAY, under THIS “college graduate”.
I personally know investing carries a lot of risk. I have been an investor of some form or another for 45 of my 62 years. I’ve made good money on “gambles”, and I’ve lost BIG money on “sure bets”. I have had a total of 4 investment advisors in all this time, I have YET to see them NOT act in MY best interest. Some of the poor decisions made were MY fault. Most, in fact. TWICE they were a result of my advisor (since shitcanned) who made investments I had wanted NOTHING to do with.
To me, this proposal stinks on ice, because this Regime time and again has shown NOTHING but disdain for the “poor middle class”, but I DO have to admire the Regime for spitting in the faces of the LAST industry who thought Obama would “do this to us”. They gave a MOUNTAIN of money to an asshole THEY were warned about. Sometimes, investment advisor community, it PAYS to “listen to the client”.
A Clyde hat-tip to Kathy.
CLYDE. Thinking the “geniuses” of Wall Street aren’t so SMART after all. Enjoy YOUR Obama double cross.