Financial Services Industry Continues Its Anti-Investor Campaigns


    Very few industries are as blatantly anti-customer as the financial services industry.

    As the following stories show, key elements of the financial industry are actively promoting legislative, regulatory and legal campaigns designed to denigrate any benefits to customer-investors, including a powerful campaign underway by a financial trade group to derail any pro-fiduciary actions from the U.S. Department of Labor.

    What’s more, these recent actions are not isolated.  They are part of the ongoing campaign to ignore any admission that the financial services industry is broken and that it has an institutionalized distain for its own customers.

    Here are the most recent news reports about anti-investor actions:

    SEC: No friend of investors
    SEC: No friend of investors

    The SEC has announced that it will not consider the mandatory arbitration of in brokerage accounts.  According to Investment News (May 20, 2013),

    “the agency won’t be taking action on the issue any time soon.”  The reason: “SEC Commissioner Elisse Walter said today that there are too many other mandatory rulemakings that the SEC must address.”  This is an astounding statement considering the SEC has more attorneys per capita than the U.S. Justice Department.  Walter also makes it sound like the SEC has been productive and considered other regulations in a timely fashion, when the rulemaking process is routinely delayed for years by financial industry lobbyists.

    The Revolving Door Keeps Turning

    This same issue of Investment News also reports that former Sen. Judd Gregg (R-N.H.), was named chief executive of the Securities Industry and Financial Markets Association (SIFMA) and Kenneth Bentsen Jr. was appointed president.  Bentsen served as a member of the House from Texas for eight years and sat on the House Financial Services Committee and the House Budget Committee.

    As expected, SIFMA is opposed to the financial reform in Dodd-Frank, as well as the Volker Rule that would prohibit investment bank proprietary trading.  According to Gregg, “the ideas [in Dodd-Frank] weren’t fleshed out. They were academic and philosophical.  The SEC has been deliberate in implementing them and I think it’s important we don’t rush into positions that have unintended consequences.”

    It’s worth noting that when SIFMA says the SEC is “deliberative,” it translates into being pliable to financial lobbying pressures and donations.  In an SEC “deliberative” situation, the interests of retail investors are not even considered, so it would be more accurate to say they were deliberately omitted from the rulemaking process.

    The appointments of Gregg and Bentsen also show the revolving door between Congress and private lobbying groups remains a vital way for pensioned Congressmen to earn even larger salaries in the private sector.  This is high-level double-dipping, but these post-Congress jobs would never be offered to ex-officials if their anti-investor voting records did not speak for themselves.

    Investor Complaints Now Subject To Shorter Statute of Limitations

    In another blow to the process of filing complaints against errant brokers, the Florida Supreme Court has rules that the state’s statute of limitations can apply to securities arbitration cases between investors and their brokers.


    In a case filed against Raymond James Financial Services, the Florida court said securities arbitrators can reduce the time investors have to file a complaint with Financial Industry Regulatory Authority from six years to four years or even two years.  The decision is noteworthy since other states could follow and reduce the time frame investors have to file formal complaints against their brokers.  The decision is especially important since Florida has a large number of retirees.

    Where Is the Media?

    While the top-tier financial media does a good job of presenting breaking market and industry news, its editorial pages and on-air commentators are often silent about the distinct anti-investor actions taken by the industry.  This disconnect could be profit-driven since there is not much money to be made in financial reform, but the silence also has an ideological component.  Big business does not tolerate dissent and any intrepid reporter’s career could be easily derailed if they started to point out the anti-investor positions routinely promoted by the industry.

    FRONTLINE     This could help explain why the PBS Frontline documentary, “The Retirement Gamble,” (which aired April 23, 2013) caused such an undercurrent of concern among many financial professionals, who could not publicly reconcile any discussions about the fiduciary standard, excessive fees and even the touted benefits of active over passive investing.  If they did, it would derail the prevailing investment services business model.  No wonder SIFMA and other major industry groups criticized the documentary and its messages.

    Who Speaks For Individual Investors?

    Since the financial services industry lobby is the largest in Washington, it should not be surprising that these actions continue to tilt the field against individual investors.  The problem is that this is a near-permanent situation.  No one advocates for investors, so any temporary gains, such as the historic pro-investor 401(k) disclosure regulations, could be considered an aberration.  As things stand today, the financial services industry lobby has targeted the DOL as the most reviled agency in Washington due to its pro-investor, pro-labor positions.

    In contrast, the SEC is a captive agency and moves at such an intentionally slow pace that critics would die of boredom as it slogs through it regulatory minutia.  Yet from its muck, many SEC staffers have emerged clean and into the better-paying private sector.

    This is only part of the price investors pay for what is touted as investing in one of the most highly-regulated financial markets in the world. The big question is: Who benefits from the regulation? It certainly is not the individual investor.

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    Chuck Epstein has managed marketing communications and public relations departments for major global financial institutions and participated in the launch of industry-changing financial products. He also has written by-lined articles for over 50 publications, five books and served as editor and publisher of nation’s first newsletter on the topic of using the PC for personal investing and trading. (“Investing Online, 1994-1999). He also is a marketing consultant, writer and speaker on topics related to investor protection and opportunities in the very dynamic cannabis industry. He has held senior-level marketing, PR and communications positions at the New York Futures Exchange, Chicago Mercantile Exchange, Lind-Waldock, Zacks Investment Research, Russell Investments and Principal Financial. He has won national awards from the Mutual Fund Education Alliance (MFEA) and his web site,, was named best small blog in 2009 by the Society of American Business Editors and Writers (SABEW).


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