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“fiduciary rule” one step closer to the Fed’s Stealing your Retirement Savings


“Saving for the future shouldn’t be a privilege for the wealthy, and Washington doesn’t need to put another roadblock between people and their financial goals. By ignoring the advice of the SEC and Congress, the DOL’s rule will increase the cost of retirement advice for lower- and middle-income Americans while creating a preferred class of rich investors. I will continue to fight for everyone’s right to get good financial advice because—unlike this administration—I believe in the people of New Jersey to make the best choices for their families and their futures.” Rep Scott Garrett

April 7,2016
the staff of the Ridgewood blog

Ridgewood NJ, Yesterday’s editorial (opening paragraphs below) point out that this set of rules is slanted to capture investment accounts with the goal of making small and medium sized savers invest in government run plans. Follow the money — those government run plans are going to lean toward investing in government paper with associated pitiful returns. That’s the conflict of interest that’s not being disclosed.

From the editorial…
President Obama’s regulators aren’t slowing down, alas. And on Wednesday they unveiled another part of their plan to push Americans out of private investment accounts and into government-run plans.

The Department of Labor says its so-called fiduciary rule will make financial advisers act in the best interests of clients. What Labor doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts. Middle-income investors may be forced to look elsewhere for financial advice even as Team Obama is enabling a raft of new government-run competitors for retirement savings. This is no coincidence.
Labor’s new rule will start biting in January as the President is leaving office. Under the rule, financial firms advising workers moving money out of company 401(k) plans into Individual Retirement Accounts will have to follow the new higher standards. But Labor has already proposed waivers from the federal Erisa law so new state-run retirement plans don’t have the same regulatory burden as private employers do.

This competitive advantage could be significant. Last month the board of California’s new “Secure Choice” retirement plan wrote to state legislators about their “exciting win” in Washington. They reported that employers enrolling workers in the new government-run plan “would have no liability or fiduciary duty for the plan.” Score! The California bureaucrats added that “we have been given the green light to auto-enroll workers into an Individual Retirement Account (IRA).”

Meanwhile, there are only losses for private competitors. The final rule Labor Secretary Tom Perez unveiled Wednesday is being marketed as less onerous than an earlier draft. Thus much of the financial industry is going to take a few weeks to decide on its response. But the main question is exactly how many billions of dollars in costs and lost opportunities will be visited upon investors. And how big the incentive will be to seek government options…

3 thoughts on ““fiduciary rule” one step closer to the Fed’s Stealing your Retirement Savings

  1. All financial advisors should abide by the fiduciary rules.

    There are a lot of people wanting to manage your money for a percent of the value of your portfolio. Why shouldn’t the clients interests be first? The good news is that software is getting better and more people realize that they can put together a diversified portfolio. And keep their money.

    There are more financial advisors than realtors in this town. The career is all the rage these days. Selling the dream and delivering thousands of dollars in fees.

    1. the “suitability” rule (the golden rule ) has been in place for at lest 30 years if not more , clearly your not an investor

  2. no wonder obama is spending big money on netting for under all the high bridge,s and hight buildings are screwing window’s 75% shut so people can not jump out. something is going on. more people jumped off the j w , bridge this year, the next time the shit hit’s the fan , watch out , last time people had money for a shit storm saved, but this time O, BOY.

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