Working people saving for retirement are losing billions

 

The fiduciary rule is an Obama-era regulation that protects Americans’ hard-earned retirement savings by requiring that financial professionals offering retirement investment advice put their clients’ interests first. The rule was supposed to be implemented on April 10, 2017. But the Trump administration has repeatedly delayed enforcement of the rule, most recently to July 1, 2019, and is using the rule-making process and delays to significantly weaken the rule.

Because of the enforcement delays, industry actors presenting themselves as neutral advisers can continue to steer retirement savers to products with high fees and commissions that benefit the advisers but reduce net returns for the client. The map shows the annual costs retirement savers in each state incur due to underperforming IRA assets that are invested in products for which savers received “conflicted” advice (that is, advice provided by financial advisers whose earnings depend on the actions taken by the client).1

EPI has used the data on annual losses to retirement savers from conflicted advice to estimate that an August 2017 Department of Labor directive delaying the rule for 18 months, to July 1, 2019, would cost workers saving for retirement $10.9 billion dollars over the next 30 years.

1. Underperformance of investment returns in which savers received conflicted advice can be attributed to a wide range of factors, including high fees, high trading costs, poor market timing, and increased risk exposure without increased returns.

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Reposted from EPI

Posted In: Allied Approaches

Union Matters

In New York, the Art of a Deal Gone Bitterly Bad

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Sam Pizzigati Editor, Too Much online magazine

“If you gain fame, power, or wealth,” the philosopher Philip Slater once noted, “you won’t have any trouble finding lovers, but they will be people who love fame, power, or wealth.” Tell me about it, David Mugrabi might be thinking right about now. The billionaire art dealer and his wife Libbie Mugrabi are currently contesting a bitter divorce that has the New York couple in and out of the courts and the headlines. In July, the two tussled in a tug-of-war over a $500,000 20-inch-tall Andy Warhol sculpture. Libbie claims the incident had her fearing for her life, and a friend has testified that David angrily called her and Libbie “low-lifes” and “gold-diggers.” The latest installment: Last Tuesday, lawyers argued over how much Libbie should get for a vacation she and their two kids will be taking this Thanksgiving. Libbie’s lawyer asked for an amount commensurate with the couple’s “$3.5-million-a-year lifestyle.” The judge okayed $4,000, then added: “No one’s going to starve in this family.”

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