Trump Declares War Against Investors

0
873

 

Unsurprisingly, the Trump Administration has declared war on individual investors, making it more difficult for millions of Americans to have a financially secure retirement. For millions, there may be no retirement, or certainly, there may be one with a lower quality of life than when people were working.

However, to hasten this downward spiral, the Trump Administration has quietly erased any pro-individual investor guidelines and regulations from the U.S. Department of Labor’s (DOL) website.

Specifically, the administration has eliminated the web pages regarding the Frequently Asked Questions (FAQs) that individual investors should ask their financial planners and 401(k) advisors (at work and for their plans) to see if they are working on behalf of investors or companies that sell financial products. The interests of both parties are almost opposite. 

The FAQs covered those the DOL issued to clarify the new fiduciary or conflict-of-interest rule (COIR) and included links to the original FAQs. However, those critical FAQs for individual investors were erased within the past few weeks. 

Don’t be victimized by financial professionals who are double-dipping and getting paid under-the-table fees by financial product providers.

And here is why:

Those FAQs empowered individual investors. Without the FAQs, many investors would not know they were being victimized by financial professionals who were double-dipping and getting paid under-the-table fees by financial product providers of mutual funds and annuities, to name a few. 

How much do seemingly small investment fees and expenses total over your career?

One estimate found that paying just 1% in fees could cost a millennial more than $590,000 in sacrificed returns over 40 years of saving.

How much do seemingly small costs total over your working career?

One estimate found that paying just 1% in fees could cost a millennial more than $590,000 in sacrificed returns over 40 years of saving.

So, with this in mind, here are the fundamental questions that investors should ask to see if their financial professional is on their side or working against them.

Kudos to Fiduciary Plan Governance and Chuck Humphrey, a former attorney for the DOL and IRS, for posting this on their website and to fiduciary standard proponent Kathleen McBride for publicizing this latest attack on investors.

Here are the questions that should be posted in every office and passed out in every workplace 401(k) meeting. 

1.      Will you acknowledge in writing that you are a fiduciary when you make investment recommendations to me? (i.e., Do you agree that you are legally required to make investment recommendations only in my best interest, and if not, why not?)

2.      Are you complying with the DOL’s conflict of interest rule and exemptions on fiduciary investment advice? If you use one of the exemptions, explain the conflict of interest requiring you to comply.

3.      Do you have a credential or designation from an accredited program that requires training and holds its members to ethical standards? Does the organization let investors file complaints about the people they have issued adviser designations to?

4.      What fees and expenses will I be charged? Will you list those fees and costs and explain what each fee and expense pays for? Do I pay you all these fees and costs directly, or are any fees and expenses taken from my investments?

5. Does the firm get paid from other sources concerning my business with you? Do you or your firm pay anyone else because I opened an account with you or because I make investments that you recommend?

6.      Do you make more money if I buy some investments instead of others? Explain why.

7.      Are there any limitations on the investment products you recommend? If so, what are they? For example, do you sell only your firm’s products (“proprietary products”), or do you sell products from other companies?

8.      Under what circumstances will you monitor my investments and make recommendations about changing my investments?

9. Why do you recommend a rollover from my current plan or IRA? Will I have to change my investments if I move my retirement savings to an IRA or a different plan? How do the fees and expenses compare to what I am paying now? Why do you think a rollover is better than leaving my retirement savings in my current retirement plan or IRA?

10.  What is your experience with advising on retirement accounts?  What customer references or customer satisfaction surveys are available for my review?

These ten questions can save you hundreds of thousands of dollars over your working lifetime. Estimates have found that the financial services industry, the firms with logos of Snoopy the Dog, whales, big bucks, lighthouses, and Homer Simpson look-alikes, are trying to take advantage of you at every step. Conflicts of interest cost investors about $17 billion annually, so work to avoid becoming a victim. Sadly, this should not be easy since the Trump administration is focused on helping the industry victimize you.

So take control over your money.

Ask the questions and determine who is working for or against you. You might be shocked by their answers.

 

Questions are from the U.S. Department of Labor

 

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here