Speaking Plainly About Who Is Robbing You ----Politics as racketeering.
HAMILTON NOLAN
AUG 13, 2024
People who are saving money for retirement often seek out professional financial advice. Why would you pay someone to give you financial advice? Because you expect them to tell you how to make the best financial decisions. Pretty straightforward.
What many professional financial advisers do instead, however, is to advise people to do things that will benefit the financial adviser. For example, instead of telling you to invest in a low-cost fund that would make the most money for you, they will instead tell you to invest in an expensive fund that pays high fees to financial advisers. This will cost you more money, leaving you with less money for retirement, but will make more money for your adviser. In other words, the professional financial advice that you paid for will be bad, not to your benefit, and geared specifically to rob you.
SNIP
The Biden administration tried to make this illegal. In April, the Labor Department finalized a rule that would require retirement advisers to be fiduciaries, meaning that they would be legally required to act in their clients’ best interests. As fiduciaries, these advisers would no longer be able to tell their clients to make foolish financial decisions that would cost them money but benefit the firms advising them. It would make it illegal for advisers to rip their clients off. Many people probably assume that it is already illegal for their financial advisers to rip them off. It is not. If it were, a huge part of the retirement advice industry would crumble into dust. As I said, it is the part of the industry that offers no redeeming social value. It is the part of the industry that exists only to transfer money from the pockets of retirement savers into the pockets of financial firms. Unambiguous robbery. Getting rid of this part of the industry and ensuring that your adviser is giving you beneficial advice rather than robbing you is one of the most straightforward examples of “the government working for you” that I can imagine.
Of course, the Retiree Robbery Industry was quite opposed to this new rule that would prevent them from robbing you. And now they have succeeded in blocking it. The Washington Post reported this weekend that the rule is on hold thanks to lawsuits filed by the industry, suits that will likely reach the Supreme Court. One federal judge has already cited the recent Supreme Court Chevron ruling to block the rule. Powerful House Republicans have also come out against the rule. “The lobbying group ACLI — whose board of directors includes executives from Prudential, Lincoln Financial and New York Life — argued in January that the government threatened to create an ‘impermissible barrier’ between savers and advisers,” the Post reports. “An allied industry group — the Federation of Americans for Consumer Choice, or FACC — argued that the rules would be ‘potentially devastating for the insurance industry,’ particularly because they could restrict agents’ commissions.”
https://www.hamiltonnolan.com/p/speaking-plainly-about-who-is-robbing
How things work until we vote the majority of Republicans out of office.
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