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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsTrump will roll back Obama rule that protected retirees from getting bilked by their advisers
On Friday, President Trump plans to sign an executive order rolling back protections put in place by the Obama administration to ensure financial advisers cant give retirees bad advice to enrich themselves.
Before what became known as the fiduciary duty rule was put in place, advisers who help retirees decide where to invest their money were allowed to steer clients toward products that made the advisers money but werent in the clients best interest. This practice was costing Americans an estimated $17 billion a year.
One of them was Phil Ashburn. When he was offered a buyout after 30 years at Pacific Bell, he turned to a financial broker for advice on how to invest the money, who told him she would make him rich and hed be set for life. But after she convinced him to put his money in a variable annuity, which fluctuates based on market performance, his original $355,000 investment went down to just $70,000 by 2015.
The broker had goaded him into that product because it made her money: she worked solely on commission and made $900,000 a year off of selling variable annuities.
Now Ashburn is worried about losing his house, and he and his wife cant afford holiday gifts for their grandchildren. This is something I wake up thinking about every morning, he told ThinkProgress. My stomach is tied in knots. I feel like a failure. It plays on you mentally and physically.
https://thinkprogress.org/trump-executive-orders-wall-street-bc0d65ccc5f8#.okopigv7y
CousinIT
(9,151 posts)For over a year, Donald Trump repeatedly stated that his vast wealth made him immune to outside influence and warned against the power of a particular Wall Street firm.
During his campaign, Trump sharply criticized Democratic presidential nominee Hillary Clinton for not releasing transcripts of speeches she gave to Goldman Sachs and other Wall Street banks. He also accused Clinton and former Republican presidential candidate Sen. Ted Cruz of being controlled by Goldman Sachs.
But now that Trump has installed Goldman Sachs alumni in every corner of the White House, its time for him to show his independence by rolling over with his belly to the sky.
President Donald Trump on Friday plans to sign an executive action to scale back the 2010 Dodd-Frank financial-overhaul law, in a sweeping plan to dismantle much of the regulatory system put in place after the financial crisis.
https://www.dailykos.com/story/2017/2/3/1629437/-Trump-sells-out-retirees-to-Wall-Street-and-removes-protections-against-economic-collapse
Turbineguy
(37,206 posts)lost a bunch of money when it turned out that the advisor who was actually running the account was a compulsive gambler. The company made good on the losses.
If the transgression is egregious enough you have recourse. In this case the compensation helped create this problem.
Wellstone ruled
(34,661 posts)than is ever reported. When the new Advisor rule came to be,it also prevented Advisor's and Broker Dealers from front running his or her clients. What this repeal will do is,bring back the Churning of Rolladexes which was a major money maker for the folks at Dean Witter,Merrill Lynch,Schwab,and others. What is means is,people are trading your accounts without your permission and or your knowledge.
Ms. Toad
(33,915 posts)I'll cheer.
Some of those make it much more costly for me to work with my advisor. To actively trade mutual funds, I will have to pay a fee based on the amount in my account. If I don't opt into that relationship, when my mutual funds spin dividends I can no longer reinvest them. I'll have to switch to EFTs (which have, historically, not done as well as the funds I reinvest).
I rarely shift funds, but I do reinvest dividends - and as of April I will no longer be able to do that on the two funds I have held the longest - and which have, over time, significantly outperformed the market. Or choose to pay about a 10-fold increase in annual fees.
atreides1
(16,046 posts)Is that this will probably have an adverse affect on people who voted for him...for them I don't give two shits! But, their narrow mindedness and intentional stupidity has hurt others...and for those people I am truly sorry!!!
malaise
(267,784 posts)Think 'Trump University' - bilking on steroids. The thieves are in charge
taught_me_patience
(5,477 posts)diversify
invest in low load index funds
allocate between stocks and bonds according to your risk tolerance. For 98% of the population, Vanguard target funds are a good mix of stocks and bonds.
That's it folks. Be skeptical of:
1) Advisors giving advice to time the market. Market timing has been proven over and over again to not beat simple index funds and dollar cost averaging. If the advisor can really time the market, why are they giving you advice and not working for Warren Buffet?
2) High fee mutual funds. Index funds beat 90% of mutual funds over the long term and have way lower fees.
3) Anything with "Annuity" in it
4) Anything with "insurance" in it
5) Anything "guaranteeing" a return.
That's it.
Yavin4
(35,354 posts)Keep some money in savings.
Sleep well at night.
Turbineguy
(37,206 posts)Indeed.
You gotta live long enough to retire.