Senate’s 2015 Omnibus Spending Bill Works Against Individual Investors


The near decade-long battle against adopting the fiduciary standard has been politicized from the start, butyesterday’s passage of the Senate’s Omnibus 2015 $1.1 trillion spending bill delivered  a huge package of tax breaks, as well as  a provision that barred the SEC from forcing financial companies from disclosing their political contributions to trade associations.

This means financial firms can contribute without any public recrimination when they donate to lobbying forms pushing against pro-consumer actions, such as fiduciary disclosure.

This is a major setback for individual investors and the pro-fiduciary disclosure advocates which will now be out-gunned by well-paid lobbyists and their mis-information campaign against the DOL and SEC efforts to push for any modicum of support for the fiduciary standard.

SEC 707 Provision
SEC 707 Provision

This buried provision was inserted into the Omnibus spending bill by Republicans in an effort to derail any of the few SEC’s pro-investor initiatives.

As shown in the provision’s language, Section 707  prevents the SEC from using its funds in any way that make it easier for individual investors to track which of their own investment firms are extracting fees and other expenses from individuals’ accounts and then converting those revenues as payments to anti-investor lobbying firms.

This is part of the perverted system by which the nation’s largest financial firms, banks and mutual fund companies take investors’ fees and use them to deceive and manipulate individual investors and those few well-meaning financial professionals who have adopted and endorse the fiduciary standard as Registered Investment Advisors (RIAs.)

To combat this adoption of any new pro-customer standard, financial services lobbyists, including those representing mutual fund companies, hedge funds, insurance company, investment banks, regularly conduct lobbying campaigns to protect their interests. Their efforts are so successful that according to Open Secrets, “the financial sector is far and away the largest source of campaign contributions to federal candidates and parties, with insurance companies, securities and investment firms, real estate interests and commercial banks providing the bulk of that money.”

Even the Investment Company Institute (ICI), the  leading trade association of the $18 trillion in assets (as of year-end 2014) mutual fund industry has shown its distain for individual mutual fund shareholders.

In a letter to Congress, the president of the ICI went on record as opposing the Department of Labor’s pro-investor disclosure rules that basically would force financial sales people to work in the best interests of their own clients.

But the ICI is only one example of how the investment industry victimizes its own customers. Here is a list of the major Washington lobbying firms  and investment firms that are the beneficiaries of Section 707’s Limitation on SEC Funds. These firms gladly and knowingly go to work every day to deceive and manipulate unsuspecting and uninformed individual investors.

No wonder there is a retirement crisis in the U.S. and no one is talking about it.   All this is happening as the nation’s major financial institutions continue their deception campaign against their own unsuspecting investors and mutual fund shareholders.

It’s quite a system.




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