# I don't know what to make of this. some say it's against the middle class



## tyroneweaver

Obama vetoes attempt to undo retirement savings rule


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## midcan5

Bernie Madoff and every scam artist agrees with you Tyroneweaver.


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## JakeStarkey

"In this case, congressional Republicans had sought to use a rarely successful maneuver under the Congressional Review Act to overturn what's known as the fiduciary rule, a Department of Labor regulation *prohibiting investment advisers from selling products with higher fees or lower returns just because they yield higher commissions*."


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## william the wie

The simple rule of thumb on advisers and analysts is that they can be profitably substituted for by software.

Were are some simple rules of thumb:

Stick to a balanced portfolio and add more categories as your portfolio grows.

Use covered options to make sure your portfolio stays balanced.

There are very few techniques that beat random picks and they operate by word of mouth.

Anyone selling you financial products instead of keeping their mouth shut to make the money themselves should be looked at with great suspicion.


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## HenryBHough

A liberal Democrat opposes responsibility and you're surprised?


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## JakeStarkey

HenryBHough said:


> A liberal Democrat opposes responsibility and you're surprised?


A good man prevents the sharks from eating the unwary.


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## Mac1958

You'll see many younger advisors leaving the industry, and you'll see consolidation to the big banks and firms because smaller broker dealers can't afford this.

But that's okay, the politicians got to write some more laws 'n stuff.  
.


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## JakeStarkey

Mac seems to think that  *investment advisers [should be faciliated in the] selling products with higher fees or lower returns just because they yield higher commissions*.

No, Mac, the money is the principal, and fiduciary responsibility is to the client first, always.

Too bad we have vetoes to make the financial hyenas do their duties.


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## Manonthestreet

This is like ocare, it does not do what bill name claims but that's all the further libs read.....


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## Mac1958

JakeStarkey said:


> Mac seems to think that  *investment advisers [should be faciliated in the] selling products with higher fees or lower returns just because they yield higher commissions*.
> 
> No, Mac, the money is the principal, and fiduciary responsibility is to the client first, always.
> 
> Too bad we have vetoes to make the financial hyenas do their duties.


I'm in the business, Jake.

You don't know what you're talking about.

But don't let that stop you.
.


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## JakeStarkey

Mac1958 said:


> I'm in the business, Jake.  You don't know what you're talking about.  But don't let that stop you..


I do know what I am talking about, so that is why you are whining.  You have no legal or moral imperative permit the government to allow you to make higher fees for your convenience at the expense of the investor.


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## Mac1958

JakeStarkey said:


> Mac1958 said:
> 
> 
> 
> I'm in the business, Jake.  You don't know what you're talking about.  But don't let that stop you..
> 
> 
> 
> I do know what I am talking about, so that is why you are whining.  You have no legal or moral imperative permit the government to allow you to make higher fees for your convenience at the expense of the investor.
Click to expand...

Nor am I arguing for that.

But, as a good and obedient partisan, you ignored what I actually said and made it into something different.

You people just constantly lie.  It appears to be in your DNA.

*This law will actually help those of us who are established, and investors will in many cases end up paying higher net fees. Lower balance investors are going to have a tough time finding competent advisors.*  Maybe DailyKos didn't cover that part.

What you think you know is nothing more than shallow, left wing talking points.  You have no idea what's behind the scenes.

But if you know so much, go ahead and educate me on how the above is wrong.  It's in bold for you, so you can't say you didn't see it.

I'll wait here.
.


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## JakeStarkey

Mac is picking a silly fight solely because I made look silly several times on the Board.

He describes himself when he accuses me of ". . .you ignored what I actually said and made it into something different."

Yes, he is partially right that the law will help him make fees from unwary investors.

No proof exists for his insistence that the veto that "investors will in many cases end up paying higher net fees" other than he is giving notice that he will make a profit that he wants one way or another from unwary investors. 

A positive remedy exists: don't use his services.

Mac is a fraud.


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## Mac1958

JakeStarkey said:


> Mac is picking a silly fight solely because I made look silly several times on the Board.
> 
> He describes himself when he accuses me of ". . .you ignored what I actually said and made it into something different."
> 
> Yes, he is partially right that the law will help him make fees from unwary investors.
> 
> No proof exists for his insistence that the veto that "investors will in many cases end up paying higher net fees" other than he is giving notice that he will make a profit that he wants one way or another from unwary investors.
> 
> A positive remedy exists: don't use his services.
> 
> Mac is a fraud.


At LEAST have the balls to quote me when you're posting about me, Jake, good gawd.

You don't know what you're talking about.  Insults and lies don't cut it.

And you calling someone else a fraud.  Love it.
.


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## JakeStarkey

Mac1958 said:


> JakeStarkey said:
> 
> 
> 
> Mac is picking a silly fight solely because I made look silly several times on the Board.
> 
> He describes himself when he accuses me of ". . .you ignored what I actually said and made it into something different."
> 
> Yes, he is partially right that the law will help him make fees from unwary investors.
> 
> No proof exists for his insistence that the veto that "investors will in many cases end up paying higher net fees" other than he is giving notice that he will make a profit that he wants one way or another from unwary investors.
> 
> A positive remedy exists: don't use his services.
> 
> Mac is a fraud.
> 
> 
> 
> At LEAST have the balls to quote me when you're posting about me, Jake, good gawd.  You don't know what you're talking about.  Insults and lies don't cut it.  And you calling someone else a fraud.  Love it..
Click to expand...

You will live by your words, fraud, by every word you write.

You want to earn higher fees while making the unwary investor take the risk.

And if you charge higher fees now to make up what you perceived you were going to make before, your clients will go elsewhere.

Win, win for client and America.


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## Mac1958

JakeStarkey said:


> Mac1958 said:
> 
> 
> 
> 
> 
> JakeStarkey said:
> 
> 
> 
> Mac is picking a silly fight solely because I made look silly several times on the Board.
> 
> He describes himself when he accuses me of ". . .you ignored what I actually said and made it into something different."
> 
> Yes, he is partially right that the law will help him make fees from unwary investors.
> 
> No proof exists for his insistence that the veto that "investors will in many cases end up paying higher net fees" other than he is giving notice that he will make a profit that he wants one way or another from unwary investors.
> 
> A positive remedy exists: don't use his services.
> 
> Mac is a fraud.
> 
> 
> 
> At LEAST have the balls to quote me when you're posting about me, Jake, good gawd.  You don't know what you're talking about.  Insults and lies don't cut it.  And you calling someone else a fraud.  Love it..
> 
> Click to expand...
> 
> You will live by your words, fraud, by every word you write.
> 
> You want to earn higher fees while making the unwary investor take the risk.
> 
> And if you charge higher fees now to make up what you perceived you were going to make before, your clients will go elsewhere.
> 
> Win, win for client and America.
Click to expand...

We're flat fee only, Jake.  Always have been.  Sorry.

This doesn't affect me in the slightest, outside of the fact that probably a quarter to a third of my competition is about to be wiped out.  Maybe more.  Otherwise, no changes.

I'm tempted to challenge you to show me your knowledge on the types of fees that will be affected, the types of financial products that will be affected, what they will be changed to, how they will affect the industry and how they will affect clients, but I've dealt with you before. 

You'll just run.  Again.  WON'T you?

All you do when you pop in with the standard Regressive Left catty/snarky comments is look foolish.  And ignorant.  And cowardly.
.


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## JakeStarkey

Sure you are.  Your flat fee is based on the amount of the investment.

What you want is the leeway to make larger investments on behalf of your unwary customer to maximize your profit.

Too bad, so sad, real mad for you.


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## Mac1958

JakeStarkey said:


> Sure you are.  Your flat fee is based on the amount of the investment.
> 
> What you want is the leeway to make larger investments on behalf of your unwary customer to maximize your profit.
> 
> Too bad, so sad, real mad for you.


"Too bad, so sad, real mad for you"  How old are you, 14?  Did a child or grandchild of yours type that?

And why don't you balls to quote me, Jake?

So now you're down to "making larger investments to maximize my profit".  Gee whiz.  The more they make, the more I make. 

Yes, that's how it works, Jake.  Clearly you don't even know THAT, yet you think you know the ramifications of the DOL law.  Love it.

Great stuff, Jake.  Catty comments, lies, insults, straw men, ignorance AND deflection.  Yet another Jake Combo Special.  Like dealing with a child.
.


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## william the wie

Does this law apply to non-exchange investment?


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## Mac1958

william the wie said:


> Does this law apply to non-exchange investment?


It's for qualified funds, so IRAs, 401Ks, etc., so the platform isn't the main issue.

Qualified accounts will have a disclosure that goes over how the advisor is compensated, which will make things more transparent than they are now.  That's a good thing, and we've been doing that forever (what's another freakin' form?); on the flip side, it's going to kill off some securities that are cheaper in fees in the long run (such as A-share mutual funds).   And the regulations are going to dis-incentivize advisors from working with lower-balance clients.  So they'll be on their own.   That's a shame, because that's precisely the time they need face-to-face guidance the most.

We'll also see (and it's already happening) a slew of larger firms taking over the smaller broker-dealers, because the smaller guys won't be able to compete.  It's also going to flush out a pretty ridiculous percentage of newer advisors who won't be able to afford the ramp-up time.  Hey, if that's what D.C. wants, more for me...

HOWEVER, if you're investing on your own, it won't affect you (although I'm sure online brokers will have more documents to file).
.


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## JakeStarkey

Mac1958 said:


> JakeStarkey said:
> 
> 
> 
> Sure you are.  Your flat fee is based on the amount of the investment.
> 
> What you want is the leeway to make larger investments on behalf of your unwary customer to maximize your profit.
> 
> Too bad, so sad, real mad for you.
> 
> 
> 
> "Too bad, so sad, real mad for you"  How old are you, 14?  Did a child or grandchild of yours type that?  And why don't you balls to quote me, Jake?  So now you're down to "making larger investments to maximize my profit".  Gee whiz.  The more they make, the more I make.  Yes, that's how it works, Jake.  Clearly you don't even know THAT, yet you think you know the ramifications of the DOL law.  Love it.  Great stuff, Jake.  Catty comments, lies, insults, straw men, ignorance AND deflection.  Yet another Jake Combo Special.  Like dealing with a child.
> .
Click to expand...

Oh, now "they more they make, the more I make."  So are you on commission?  Or are you not?  You are a liar, and I doubt not you were barred out of the profession long ago.


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## HenryBHough

When is dealing with a pre-teen NOT dealing with a child?


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## Mac1958

JakeStarkey said:


> Mac1958 said:
> 
> 
> 
> 
> 
> JakeStarkey said:
> 
> 
> 
> Sure you are.  Your flat fee is based on the amount of the investment.
> 
> What you want is the leeway to make larger investments on behalf of your unwary customer to maximize your profit.
> 
> Too bad, so sad, real mad for you.
> 
> 
> 
> "Too bad, so sad, real mad for you"  How old are you, 14?  Did a child or grandchild of yours type that?  And why don't you balls to quote me, Jake?  So now you're down to "making larger investments to maximize my profit".  Gee whiz.  The more they make, the more I make.  Yes, that's how it works, Jake.  Clearly you don't even know THAT, yet you think you know the ramifications of the DOL law.  Love it.  Great stuff, Jake.  Catty comments, lies, insults, straw men, ignorance AND deflection.  Yet another Jake Combo Special.  Like dealing with a child.
> .
> 
> Click to expand...
> 
> Oh, now "they more they make, the more I make."  So are you on commission?  Or are you not?  You are a liar, and I doubt not you were barred out of the profession long ago.
Click to expand...

Uh, no, that's how fee-based arrangements work, Jake.  I'm paid a flat percentage on the *value of the account. * The higher the value of the account, the higher my quarterly fee.  The more they make, the more they have, the more I make based on that percentage of the value of the account.
_
That's what "fee based" means, Jake.  Clearly you didn't know that.  And you're pretending to know the DOL rule???_

Wow, you really have lost it.  You really have made a fool of yourself here, Jake.

Why in the world are you staying on this?  All nasty, personal, yikes -- you're flailing here, and I'm beginning to suspect you and JoeB are the same person.


I'm so far up in the heads of the Regressive Left at this point, they go freakin' mental on me.  Meltdown time for ol' Jake.  Don't blame_* me.*_
.


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## william the wie

lunatic left is a redundancy. I was actually asked what kind of computer runs on linear programming.


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## Mac1958

Crickets.


.


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## Skull Pilot

Why do any of you people use investment advisers when you can do just fine on your own?


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## Mac1958

Skull Pilot said:


> Why do any of you people use investment advisers when you can do just fine on your own?


Two reasons.

First, there are plenty of people who are just not comfortable with finance and would rather have a professional do it.  Ask me to rebuild a transmission and you'll see me on the floor in the fetal position pretty quickly.  That's how they are with personal investing.

Second, an experienced and properly-educated advisor will also assist on minimizing tax exposure, retirement income planning, estate planning issues, outside investments such as real estate, business buying & selling & operating, family communication, working with attorneys, on & on.  I have clients who know investing pretty well but use me because I can see the big picture - plus, they're just too busy for proper investment analysis and tactical buying/selling.

But yeah, many can do this stuff on their own.
.


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## Skull Pilot

Mac1958 said:


> Skull Pilot said:
> 
> 
> 
> Why do any of you people use investment advisers when you can do just fine on your own?
> 
> 
> 
> Two reasons.
> 
> First, there are plenty of people who are just not comfortable with finance and would rather have a professional do it.  Ask me to rebuild a transmission and you'll see me on the floor in the fetal position pretty quickly.  That's how they are with personal investing.
> 
> Second, an experienced and properly-educated advisor will also assist on minimizing tax exposure, retirement income planning, estate planning issues, outside investments such as real estate, business buying & selling & operating, family communication, working with attorneys, on & on.  I have clients who know investing pretty well but use me because I can see the big picture - plus, they're just too busy for proper investment analysis and tactical buying/selling.
> 
> But yeah, many can do this stuff on their own.
> .
Click to expand...


An investment adviser does not do estate planning that's a lawyer

An investment adviser takes your money and puts in different vehicles for you and then takes a percentage of your portfolio every quarter

Anyone with a computer and a little diligence can pick their own investments

The only strategy for the average save for retirement investors is long term buy and hold in a balanced portfolio that is rebalanced quarterly


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## Mac1958

Skull Pilot said:


> Mac1958 said:
> 
> 
> 
> 
> 
> Skull Pilot said:
> 
> 
> 
> Why do any of you people use investment advisers when you can do just fine on your own?
> 
> 
> 
> Two reasons.
> 
> First, there are plenty of people who are just not comfortable with finance and would rather have a professional do it.  Ask me to rebuild a transmission and you'll see me on the floor in the fetal position pretty quickly.  That's how they are with personal investing.
> 
> Second, an experienced and properly-educated advisor will also assist on minimizing tax exposure, retirement income planning, estate planning issues, outside investments such as real estate, business buying & selling & operating, family communication, working with attorneys, on & on.  I have clients who know investing pretty well but use me because I can see the big picture - plus, they're just too busy for proper investment analysis and tactical buying/selling.
> 
> But yeah, many can do this stuff on their own.
> .
> 
> Click to expand...
> 
> 
> An investment adviser does not do estate planning that's a lawyer
> 
> An investment adviser takes your money and puts in different vehicles for you and then takes a percentage of your portfolio every quarter
> 
> Anyone with a computer and a little diligence can pick their own investments
> 
> The only strategy for the average save for retirement investors is long term buy and hold in a balanced portfolio that is rebalanced quarterly
Click to expand...

A CFP can coordinate estate planning pretty easily without a lawyer, and/or work with the family lawyer on the plan.  I do it all the time, attorneys often need my services and input on family finances.

If you don't need the other services I described, and you're comfortable doing it yourself, great.

Many, many people are not.  To them it's worth 1% or whatever.  Why is that such a big deal?
.


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## Windship

oblama=traitor. bush=traitor. They all make law and policy that continues to erode the backbone and builder of what was a very strong economy. So, I guess my comment would be..."duh".       
oblama...a dem...supposed to be for the working class and continues to let in  cheap labor from mex, H1B visa's (increasing at 250k per yr since oblama was elected)  and make lopsided trade deals. Clinton was an enemy of labor as well for the same reasons.


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## rightwinger

tyroneweaver said:


> Obama vetoes attempt to undo retirement savings rule




_ President Obama vetoed an effort to roll back new rules intended to protect retirement savings Wednesday, *solidifying his administration's regulations requiring investment advisers to look out for their clients' best interests.*

"The Department of Labor's final rule will ensure that American workers and retirees receive retirement advice that is in their best interest, better enabling them to protect and grow their savings," Obama said in a veto message to Congress. "It is essential that these critical protections go into effect."
_
The bastard


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## Windship

...course, you stock market sit on yer ass and profit from it all dont you?


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## Mac1958

tyroneweaver said:


> Obama vetoes attempt to undo retirement savings rule


I have some time here to go into a bit of detail.

Up front, the law has some good qualities, I'm not saying that it does not.  But it's another classic case of over-reacting to a problem and throwing the baby out with the bathwater.  To wit:

The law is going to (1) cause further consolidation in the advisory industry because of increased regulatory administration costs, so The Big Boys so loathed by many who support this law are going to benefit.  It's already happening, even though the law doesn't go into effect until next April and is not going to be enforced until January 2018.

The law is going to (2) leave smaller investors out in the cold because it won't be worth it to many advisors to work with them.  This will mean that many investors who would also benefit from the investment, tax, college funding and many other services included in advisory relationships will be on their own.  Sorry.

The law is going to (3) benefit older, established advisors because it's going to kill off AT LEAST 25% to 33% of younger advisors pretty much overnight.  Those clients will have to go somewhere and obtaining them with the reduced competition will be easier.  This, at a time when the industry is damn near desperate for young advisors.

Here's an example - remember, fees are the big deal, right?:  Let's say we have a young family, Mom & Dad working hard and putting money into their 401K plans.  They have accumulated $108,587 in those plans.  They change jobs and want to roll those old plans into IRAs.  They go to a younger advisor who offers to put them in American Funds A Share mutual funds, which charge a one-time, 3.50% up front load on those funds at that balance amount.  They'd be using four *excellent, Morningstar 4-star and 5-star rated* mutual funds (let's say AMRMX, NEWFX, ABALAX, AWSHX), and the advisor and his firm would be responsible for managing the account.  Over ten years, because they only paid the up front fee once, they would have averaged only about *0.40% annually* in fees for their advisor (plus, I think, 12b-1 fees of about .25% per year, I don't remember).  That evil young advisor, depending on his contract, would make a one-time fee of anywhere from $1,000 to $2,700 but would be permanently, legally responsible for that account.

Those days are gone.  Poof.

So, they come to me, and I charge them my regular fee for accounts of that (smaller) size, *1.20% annually* (and actually, I don't know that I would necessarily take them on).  Plus, *I'm making more annually, every year, as it grows.*  I'm using good funds, too, of course, but can I guarantee that they'd be better off than they would have been with American Funds?  Nope.

So they're paying *a ton more in fees* over ten years than they had to, because of this law, with ZERO guarantee of better performance.

And one more thing:  If they only have $23,000 and go to that younger advisor, he's gone, because he couldn't afford to live on small annual fees alone.  They don't have enough to work with me or anyone like me.  So, good luck, tough crap.  Buy some books on investing and taxation and college planning and tough questions and general financial guidance and family issues and whatever else you need help with. And if you're not comfortable with all of the above, sorry.

Is that really "in their best interest"?
.


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## Tehon

Mac1958 said:


> tyroneweaver said:
> 
> 
> 
> Obama vetoes attempt to undo retirement savings rule
> 
> 
> 
> I have some time here to go into a bit of detail.
> 
> Up front, the law has some good qualities, I'm not saying that it does not.  But it's another classic case of over-reacting to a problem and throwing the baby out with the bathwater.  To wit:
> 
> The law is going to (1) cause further consolidation in the advisory industry because of increased regulatory administration costs, so The Big Boys so loathed by many who support this law are going to benefit.  It's already happening, even though the law doesn't go into effect until next April and is not going to be enforced until January 2018.
> 
> The law is going to (2) leave smaller investors out in the cold because it won't be worth it to many advisors to work with them.  This will mean that many investors who would also benefit from the investment, tax, college funding and many other services included in advisory relationships will be on their own.  Sorry.
> 
> The law is going to (3) benefit older, established advisors because it's going to kill off AT LEAST 25% to 33% of younger advisors pretty much overnight.  Those clients will have to go somewhere and obtaining them with the reduced competition will be easier.  This, at a time when the industry is damn near desperate for young advisors.
> 
> Here's an example - remember, fees are the big deal, right?:  Let's say we have a young family, Mom & Dad working hard and putting money into their 401K plans.  They have accumulated $108,587 in those plans.  They change jobs and want to roll those old plans into IRAs.  They go to a younger advisor who offers to put them in American Funds A Share mutual funds, which charge a one-time, 3.50% up front load on those funds at that balance amount.  They'd be using four *excellent, Morningstar 4-star and 5-star rated* mutual funds (let's say AMRMX, NEWFX, ABALAX, AWSHX), and the advisor and his firm would be responsible for managing the account.  Over ten years, because they only paid the up front fee once, they would have averaged only about *0.40% annually* in fees for their advisor (plus, I think, 12b-1 fees of about .25% per year, I don't remember).  That evil young advisor, depending on his contract, would make a one-time fee of anywhere from $1,000 to $2,700 but would be permanently, legally responsible for that account.
> 
> Those days are gone.  Poof.
> 
> So, they come to me, and I charge them my regular fee for accounts of that (smaller) size, *1.20% annually* (and actually, I don't know that I would necessarily take them on).  Plus, *I'm making more annually, every year, as it grows.*  I'm using good funds, too, of course, but can I guarantee that they'd be better off than they would have been with American Funds?  Nope.
> 
> So they're paying *a ton more in fees* over ten years than they had to, because of this law, with ZERO guarantee of better performance.
> 
> And one more thing:  If they only have $23,000 and go to that younger advisor, he's gone, because he couldn't afford to live on small annual fees alone.  They don't have enough to work with me or anyone like me.  So, good luck, tough crap.  Buy some books on investing and taxation and college planning and tough questions and general financial guidance and family issues and whatever else you need help with. And if you're not comfortable with all of the above, sorry.
> 
> Is that really "in their best interest"?
> .
Click to expand...

Where does the Best Interest Contract Exemption fit in to your scenario?


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## Mac1958

Tehon said:


> Mac1958 said:
> 
> 
> 
> 
> 
> tyroneweaver said:
> 
> 
> 
> Obama vetoes attempt to undo retirement savings rule
> 
> 
> 
> I have some time here to go into a bit of detail.
> 
> Up front, the law has some good qualities, I'm not saying that it does not.  But it's another classic case of over-reacting to a problem and throwing the baby out with the bathwater.  To wit:
> 
> The law is going to (1) cause further consolidation in the advisory industry because of increased regulatory administration costs, so The Big Boys so loathed by many who support this law are going to benefit.  It's already happening, even though the law doesn't go into effect until next April and is not going to be enforced until January 2018.
> 
> The law is going to (2) leave smaller investors out in the cold because it won't be worth it to many advisors to work with them.  This will mean that many investors who would also benefit from the investment, tax, college funding and many other services included in advisory relationships will be on their own.  Sorry.
> 
> The law is going to (3) benefit older, established advisors because it's going to kill off AT LEAST 25% to 33% of younger advisors pretty much overnight.  Those clients will have to go somewhere and obtaining them with the reduced competition will be easier.  This, at a time when the industry is damn near desperate for young advisors.
> 
> Here's an example - remember, fees are the big deal, right?:  Let's say we have a young family, Mom & Dad working hard and putting money into their 401K plans.  They have accumulated $108,587 in those plans.  They change jobs and want to roll those old plans into IRAs.  They go to a younger advisor who offers to put them in American Funds A Share mutual funds, which charge a one-time, 3.50% up front load on those funds at that balance amount.  They'd be using four *excellent, Morningstar 4-star and 5-star rated* mutual funds (let's say AMRMX, NEWFX, ABALAX, AWSHX), and the advisor and his firm would be responsible for managing the account.  Over ten years, because they only paid the up front fee once, they would have averaged only about *0.40% annually* in fees for their advisor (plus, I think, 12b-1 fees of about .25% per year, I don't remember).  That evil young advisor, depending on his contract, would make a one-time fee of anywhere from $1,000 to $2,700 but would be permanently, legally responsible for that account.
> 
> Those days are gone.  Poof.
> 
> So, they come to me, and I charge them my regular fee for accounts of that (smaller) size, *1.20% annually* (and actually, I don't know that I would necessarily take them on).  Plus, *I'm making more annually, every year, as it grows.*  I'm using good funds, too, of course, but can I guarantee that they'd be better off than they would have been with American Funds?  Nope.
> 
> So they're paying *a ton more in fees* over ten years than they had to, because of this law, with ZERO guarantee of better performance.
> 
> And one more thing:  If they only have $23,000 and go to that younger advisor, he's gone, because he couldn't afford to live on small annual fees alone.  They don't have enough to work with me or anyone like me.  So, good luck, tough crap.  Buy some books on investing and taxation and college planning and tough questions and general financial guidance and family issues and whatever else you need help with. And if you're not comfortable with all of the above, sorry.
> 
> Is that really "in their best interest"?
> .
> 
> Click to expand...
> 
> Where does the Best Interest Contract Exemption fit in to your scenario?
Click to expand...

As I understand BICE, it allows contracts in place to be grandfathered in, so for example if a 401K plan is based on A Shares that would continue, although the sponsor would have to receive full disclosure. Another pile of paperwork, no doubt.

Doesn't affect me personally, I'm fee-only, no conflicts of interest.
.


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## Tehon

Mac1958 said:


> Tehon said:
> 
> 
> 
> 
> 
> Mac1958 said:
> 
> 
> 
> 
> 
> tyroneweaver said:
> 
> 
> 
> Obama vetoes attempt to undo retirement savings rule
> 
> 
> 
> I have some time here to go into a bit of detail.
> 
> Up front, the law has some good qualities, I'm not saying that it does not.  But it's another classic case of over-reacting to a problem and throwing the baby out with the bathwater.  To wit:
> 
> The law is going to (1) cause further consolidation in the advisory industry because of increased regulatory administration costs, so The Big Boys so loathed by many who support this law are going to benefit.  It's already happening, even though the law doesn't go into effect until next April and is not going to be enforced until January 2018.
> 
> The law is going to (2) leave smaller investors out in the cold because it won't be worth it to many advisors to work with them.  This will mean that many investors who would also benefit from the investment, tax, college funding and many other services included in advisory relationships will be on their own.  Sorry.
> 
> The law is going to (3) benefit older, established advisors because it's going to kill off AT LEAST 25% to 33% of younger advisors pretty much overnight.  Those clients will have to go somewhere and obtaining them with the reduced competition will be easier.  This, at a time when the industry is damn near desperate for young advisors.
> 
> Here's an example - remember, fees are the big deal, right?:  Let's say we have a young family, Mom & Dad working hard and putting money into their 401K plans.  They have accumulated $108,587 in those plans.  They change jobs and want to roll those old plans into IRAs.  They go to a younger advisor who offers to put them in American Funds A Share mutual funds, which charge a one-time, 3.50% up front load on those funds at that balance amount.  They'd be using four *excellent, Morningstar 4-star and 5-star rated* mutual funds (let's say AMRMX, NEWFX, ABALAX, AWSHX), and the advisor and his firm would be responsible for managing the account.  Over ten years, because they only paid the up front fee once, they would have averaged only about *0.40% annually* in fees for their advisor (plus, I think, 12b-1 fees of about .25% per year, I don't remember).  That evil young advisor, depending on his contract, would make a one-time fee of anywhere from $1,000 to $2,700 but would be permanently, legally responsible for that account.
> 
> Those days are gone.  Poof.
> 
> So, they come to me, and I charge them my regular fee for accounts of that (smaller) size, *1.20% annually* (and actually, I don't know that I would necessarily take them on).  Plus, *I'm making more annually, every year, as it grows.*  I'm using good funds, too, of course, but can I guarantee that they'd be better off than they would have been with American Funds?  Nope.
> 
> So they're paying *a ton more in fees* over ten years than they had to, because of this law, with ZERO guarantee of better performance.
> 
> And one more thing:  If they only have $23,000 and go to that younger advisor, he's gone, because he couldn't afford to live on small annual fees alone.  They don't have enough to work with me or anyone like me.  So, good luck, tough crap.  Buy some books on investing and taxation and college planning and tough questions and general financial guidance and family issues and whatever else you need help with. And if you're not comfortable with all of the above, sorry.
> 
> Is that really "in their best interest"?
> .
> 
> Click to expand...
> 
> Where does the Best Interest Contract Exemption fit in to your scenario?
> 
> Click to expand...
> 
> As I understand BICE, it allows contracts in place to be grandfathered in, so for example if a 401K plan is based on A Shares that would continue, although the sponsor would have to receive full disclosure. Another pile of paperwork, no doubt.
> 
> Doesn't affect me personally, I'm fee-only, no conflicts of interest.
> .
Click to expand...

It allows those A share mutual funds to be sold to new investors once a full disclosure agreement has been signed.


----------



## Mac1958

Tehon said:


> Mac1958 said:
> 
> 
> 
> 
> 
> Tehon said:
> 
> 
> 
> 
> 
> Mac1958 said:
> 
> 
> 
> 
> 
> tyroneweaver said:
> 
> 
> 
> Obama vetoes attempt to undo retirement savings rule
> 
> 
> 
> I have some time here to go into a bit of detail.
> 
> Up front, the law has some good qualities, I'm not saying that it does not.  But it's another classic case of over-reacting to a problem and throwing the baby out with the bathwater.  To wit:
> 
> The law is going to (1) cause further consolidation in the advisory industry because of increased regulatory administration costs, so The Big Boys so loathed by many who support this law are going to benefit.  It's already happening, even though the law doesn't go into effect until next April and is not going to be enforced until January 2018.
> 
> The law is going to (2) leave smaller investors out in the cold because it won't be worth it to many advisors to work with them.  This will mean that many investors who would also benefit from the investment, tax, college funding and many other services included in advisory relationships will be on their own.  Sorry.
> 
> The law is going to (3) benefit older, established advisors because it's going to kill off AT LEAST 25% to 33% of younger advisors pretty much overnight.  Those clients will have to go somewhere and obtaining them with the reduced competition will be easier.  This, at a time when the industry is damn near desperate for young advisors.
> 
> Here's an example - remember, fees are the big deal, right?:  Let's say we have a young family, Mom & Dad working hard and putting money into their 401K plans.  They have accumulated $108,587 in those plans.  They change jobs and want to roll those old plans into IRAs.  They go to a younger advisor who offers to put them in American Funds A Share mutual funds, which charge a one-time, 3.50% up front load on those funds at that balance amount.  They'd be using four *excellent, Morningstar 4-star and 5-star rated* mutual funds (let's say AMRMX, NEWFX, ABALAX, AWSHX), and the advisor and his firm would be responsible for managing the account.  Over ten years, because they only paid the up front fee once, they would have averaged only about *0.40% annually* in fees for their advisor (plus, I think, 12b-1 fees of about .25% per year, I don't remember).  That evil young advisor, depending on his contract, would make a one-time fee of anywhere from $1,000 to $2,700 but would be permanently, legally responsible for that account.
> 
> Those days are gone.  Poof.
> 
> So, they come to me, and I charge them my regular fee for accounts of that (smaller) size, *1.20% annually* (and actually, I don't know that I would necessarily take them on).  Plus, *I'm making more annually, every year, as it grows.*  I'm using good funds, too, of course, but can I guarantee that they'd be better off than they would have been with American Funds?  Nope.
> 
> So they're paying *a ton more in fees* over ten years than they had to, because of this law, with ZERO guarantee of better performance.
> 
> And one more thing:  If they only have $23,000 and go to that younger advisor, he's gone, because he couldn't afford to live on small annual fees alone.  They don't have enough to work with me or anyone like me.  So, good luck, tough crap.  Buy some books on investing and taxation and college planning and tough questions and general financial guidance and family issues and whatever else you need help with. And if you're not comfortable with all of the above, sorry.
> 
> Is that really "in their best interest"?
> .
> 
> Click to expand...
> 
> Where does the Best Interest Contract Exemption fit in to your scenario?
> 
> Click to expand...
> 
> As I understand BICE, it allows contracts in place to be grandfathered in, so for example if a 401K plan is based on A Shares that would continue, although the sponsor would have to receive full disclosure. Another pile of paperwork, no doubt.
> 
> Doesn't affect me personally, I'm fee-only, no conflicts of interest.
> .
> 
> Click to expand...
> 
> It allows those A share mutual funds to be sold to new investors once a full disclosure agreement has been signed.
Click to expand...

Theoretically yes, but broker/dealers aren't going to allow the advisors to sell them.  I've heard Edward Jones (by far the biggest player in A Shares) has already told its people to move towards fee-based and/or C Shares.

Look at it logistically:  We can do these investments, or those investments.  But if you want those investments, you have to sign this form.  That puts an element of doubt in the process.  I can't speak for Edward Jones and the others, but that's the vibe I'm getting.  I have a (beer) buddy at UBS who says A Shares will be toxic there too.

I hear there's a line of lawsuits around the block on this thing, but I suspect it's a waste of time.  Maybe at least a few rules will be relaxed.  They could have done this far differently.  
.


----------



## Tehon

Mac1958 said:


> Tehon said:
> 
> 
> 
> 
> 
> Mac1958 said:
> 
> 
> 
> 
> 
> Tehon said:
> 
> 
> 
> 
> 
> Mac1958 said:
> 
> 
> 
> 
> 
> tyroneweaver said:
> 
> 
> 
> Obama vetoes attempt to undo retirement savings rule
> 
> 
> 
> I have some time here to go into a bit of detail.
> 
> Up front, the law has some good qualities, I'm not saying that it does not.  But it's another classic case of over-reacting to a problem and throwing the baby out with the bathwater.  To wit:
> 
> The law is going to (1) cause further consolidation in the advisory industry because of increased regulatory administration costs, so The Big Boys so loathed by many who support this law are going to benefit.  It's already happening, even though the law doesn't go into effect until next April and is not going to be enforced until January 2018.
> 
> The law is going to (2) leave smaller investors out in the cold because it won't be worth it to many advisors to work with them.  This will mean that many investors who would also benefit from the investment, tax, college funding and many other services included in advisory relationships will be on their own.  Sorry.
> 
> The law is going to (3) benefit older, established advisors because it's going to kill off AT LEAST 25% to 33% of younger advisors pretty much overnight.  Those clients will have to go somewhere and obtaining them with the reduced competition will be easier.  This, at a time when the industry is damn near desperate for young advisors.
> 
> Here's an example - remember, fees are the big deal, right?:  Let's say we have a young family, Mom & Dad working hard and putting money into their 401K plans.  They have accumulated $108,587 in those plans.  They change jobs and want to roll those old plans into IRAs.  They go to a younger advisor who offers to put them in American Funds A Share mutual funds, which charge a one-time, 3.50% up front load on those funds at that balance amount.  They'd be using four *excellent, Morningstar 4-star and 5-star rated* mutual funds (let's say AMRMX, NEWFX, ABALAX, AWSHX), and the advisor and his firm would be responsible for managing the account.  Over ten years, because they only paid the up front fee once, they would have averaged only about *0.40% annually* in fees for their advisor (plus, I think, 12b-1 fees of about .25% per year, I don't remember).  That evil young advisor, depending on his contract, would make a one-time fee of anywhere from $1,000 to $2,700 but would be permanently, legally responsible for that account.
> 
> Those days are gone.  Poof.
> 
> So, they come to me, and I charge them my regular fee for accounts of that (smaller) size, *1.20% annually* (and actually, I don't know that I would necessarily take them on).  Plus, *I'm making more annually, every year, as it grows.*  I'm using good funds, too, of course, but can I guarantee that they'd be better off than they would have been with American Funds?  Nope.
> 
> So they're paying *a ton more in fees* over ten years than they had to, because of this law, with ZERO guarantee of better performance.
> 
> And one more thing:  If they only have $23,000 and go to that younger advisor, he's gone, because he couldn't afford to live on small annual fees alone.  They don't have enough to work with me or anyone like me.  So, good luck, tough crap.  Buy some books on investing and taxation and college planning and tough questions and general financial guidance and family issues and whatever else you need help with. And if you're not comfortable with all of the above, sorry.
> 
> Is that really "in their best interest"?
> .
> 
> Click to expand...
> 
> Where does the Best Interest Contract Exemption fit in to your scenario?
> 
> Click to expand...
> 
> As I understand BICE, it allows contracts in place to be grandfathered in, so for example if a 401K plan is based on A Shares that would continue, although the sponsor would have to receive full disclosure. Another pile of paperwork, no doubt.
> 
> Doesn't affect me personally, I'm fee-only, no conflicts of interest.
> .
> 
> Click to expand...
> 
> It allows those A share mutual funds to be sold to new investors once a full disclosure agreement has been signed.
> 
> Click to expand...
> 
> Theoretically yes, but broker/dealers aren't going to allow the advisors to sell them.  I've heard Edward Jones (by far the biggest player in A Shares) has already told its people to move towards fee-based and/or C Shares.
> 
> Look at it logistically:  We can do these investments, or those investments.  But if you want those investments, you have to sign this form.  That puts an element of doubt in the process.  I can't speak for Edward Jones and the others, but that's the vibe I'm getting.  I have a (beer) buddy at UBS who says A Shares will be toxic there too.
> 
> I hear there's a line of lawsuits around the block on this thing, but I suspect it's a waste of time.  Maybe at least a few rules will be relaxed.  They could have done this far differently.
> .
Click to expand...

* but broker/dealers aren't going to allow the advisors to sell them.*

Why not? Are A shares loaded with hidden costs that they don't want disclosed?


----------



## Mac1958

Tehon said:


> Mac1958 said:
> 
> 
> 
> 
> 
> Tehon said:
> 
> 
> 
> 
> 
> Mac1958 said:
> 
> 
> 
> 
> 
> Tehon said:
> 
> 
> 
> 
> 
> Mac1958 said:
> 
> 
> 
> I have some time here to go into a bit of detail.
> 
> Up front, the law has some good qualities, I'm not saying that it does not.  But it's another classic case of over-reacting to a problem and throwing the baby out with the bathwater.  To wit:
> 
> The law is going to (1) cause further consolidation in the advisory industry because of increased regulatory administration costs, so The Big Boys so loathed by many who support this law are going to benefit.  It's already happening, even though the law doesn't go into effect until next April and is not going to be enforced until January 2018.
> 
> The law is going to (2) leave smaller investors out in the cold because it won't be worth it to many advisors to work with them.  This will mean that many investors who would also benefit from the investment, tax, college funding and many other services included in advisory relationships will be on their own.  Sorry.
> 
> The law is going to (3) benefit older, established advisors because it's going to kill off AT LEAST 25% to 33% of younger advisors pretty much overnight.  Those clients will have to go somewhere and obtaining them with the reduced competition will be easier.  This, at a time when the industry is damn near desperate for young advisors.
> 
> Here's an example - remember, fees are the big deal, right?:  Let's say we have a young family, Mom & Dad working hard and putting money into their 401K plans.  They have accumulated $108,587 in those plans.  They change jobs and want to roll those old plans into IRAs.  They go to a younger advisor who offers to put them in American Funds A Share mutual funds, which charge a one-time, 3.50% up front load on those funds at that balance amount.  They'd be using four *excellent, Morningstar 4-star and 5-star rated* mutual funds (let's say AMRMX, NEWFX, ABALAX, AWSHX), and the advisor and his firm would be responsible for managing the account.  Over ten years, because they only paid the up front fee once, they would have averaged only about *0.40% annually* in fees for their advisor (plus, I think, 12b-1 fees of about .25% per year, I don't remember).  That evil young advisor, depending on his contract, would make a one-time fee of anywhere from $1,000 to $2,700 but would be permanently, legally responsible for that account.
> 
> Those days are gone.  Poof.
> 
> So, they come to me, and I charge them my regular fee for accounts of that (smaller) size, *1.20% annually* (and actually, I don't know that I would necessarily take them on).  Plus, *I'm making more annually, every year, as it grows.*  I'm using good funds, too, of course, but can I guarantee that they'd be better off than they would have been with American Funds?  Nope.
> 
> So they're paying *a ton more in fees* over ten years than they had to, because of this law, with ZERO guarantee of better performance.
> 
> And one more thing:  If they only have $23,000 and go to that younger advisor, he's gone, because he couldn't afford to live on small annual fees alone.  They don't have enough to work with me or anyone like me.  So, good luck, tough crap.  Buy some books on investing and taxation and college planning and tough questions and general financial guidance and family issues and whatever else you need help with. And if you're not comfortable with all of the above, sorry.
> 
> Is that really "in their best interest"?
> .
> 
> 
> 
> Where does the Best Interest Contract Exemption fit in to your scenario?
> 
> Click to expand...
> 
> As I understand BICE, it allows contracts in place to be grandfathered in, so for example if a 401K plan is based on A Shares that would continue, although the sponsor would have to receive full disclosure. Another pile of paperwork, no doubt.
> 
> Doesn't affect me personally, I'm fee-only, no conflicts of interest.
> .
> 
> Click to expand...
> 
> It allows those A share mutual funds to be sold to new investors once a full disclosure agreement has been signed.
> 
> Click to expand...
> 
> Theoretically yes, but broker/dealers aren't going to allow the advisors to sell them.  I've heard Edward Jones (by far the biggest player in A Shares) has already told its people to move towards fee-based and/or C Shares.
> 
> Look at it logistically:  We can do these investments, or those investments.  But if you want those investments, you have to sign this form.  That puts an element of doubt in the process.  I can't speak for Edward Jones and the others, but that's the vibe I'm getting.  I have a (beer) buddy at UBS who says A Shares will be toxic there too.
> 
> I hear there's a line of lawsuits around the block on this thing, but I suspect it's a waste of time.  Maybe at least a few rules will be relaxed.  They could have done this far differently.
> .
> 
> Click to expand...
> 
> * but broker/dealers aren't going to allow the advisors to sell them.*
> 
> Why not? Are A shares loaded with hidden costs that they don't want disclosed?
Click to expand...

I explained why not.  A Shares are going to have a "bad name" (deserved or not) and the BDs are terrified of getting sideways with FINRA, the SEC, the Feds.

And yes, as I also mentioned, I think they still carry "12b-1" fees of .25%.  What should have happened was they should have just been disallowed and mutual fund companies would have to have only the regular fees.  Then they'd have to deal with keeping their costs down and being competitive.

But that's not nearly enough regulation.
.


----------



## Tehon

These rule changes are a long time in the making. The industry has no one to blame but itself, yet the industry will ensure that the investors pay the price for their own lack of ethics and all the while blaming it on the government.

Edward Jones Agrees to Settle Host of Charges
Revenue sharing, called "pay to play" by critics, isn't illegal, but regulators are taking the position that failing to disclose such arrangements violates the law. California's suit alleges that by keeping the payments secret, Edward D. Jones broke a state law requiring brokers to disclose all the facts investors need in order to make informed decisions.

The suit alleges that Edward D. Jones received payments primarily in cash, but also from brokerage commissions stemming from securities trades that fund companies steer to brokers that market more of their fund shares. The arrangements, known as "directed brokerage," were banned by the SEC this year. As money managers, fund companies have an obligation to fund shareholders to seek the best prices in buying and selling stocks, and they aren't supposed to base such decisions on their own financial gain. The agreements were generally oral, the suit alleges.

The suit alleges Edward D. Jones had an incentive to favor funds that paid it, and that individual broker bonuses depended in part on how many preferred funds they sold. According to an internal e-mail enclosed as an exhibit to the suit, revenue sharing was a factor in drawing up "profit and loss," or P&L, statements for brokers, which in turn determine bonus size.


----------



## Mac1958

Tehon said:


> These rule changes are a long time in the making. The industry has no one to blame but itself, yet the industry will ensure that the investors pay the price for their own lack of ethics and all the while blaming it on the government.
> 
> Edward Jones Agrees to Settle Host of Charges
> Revenue sharing, called "pay to play" by critics, isn't illegal, but regulators are taking the position that failing to disclose such arrangements violates the law. California's suit alleges that by keeping the payments secret, Edward D. Jones broke a state law requiring brokers to disclose all the facts investors need in order to make informed decisions.
> 
> The suit alleges that Edward D. Jones received payments primarily in cash, but also from brokerage commissions stemming from securities trades that fund companies steer to brokers that market more of their fund shares. The arrangements, known as "directed brokerage," were banned by the SEC this year. As money managers, fund companies have an obligation to fund shareholders to seek the best prices in buying and selling stocks, and they aren't supposed to base such decisions on their own financial gain. The agreements were generally oral, the suit alleges.
> 
> The suit alleges Edward D. Jones had an incentive to favor funds that paid it, and that individual broker bonuses depended in part on how many preferred funds they sold. According to an internal e-mail enclosed as an exhibit to the suit, revenue sharing was a factor in drawing up "profit and loss," or P&L, statements for brokers, which in turn determine bonus size.


Indeed, the financial services industry has committed many sins.  I could give you a pretty long list of highly questionable things I've seen people in the industry have done, first hand. I've seen some pretty nasty stuff.

Careful, efficient, effective regulation is absolutely necessary, there are simply no two ways about it.  Those who kneejerk against all regulation are simply wrong.

Probably the single biggest individual problem right now is the fact that people who push Equity Indexed Annuities need nothing more than a life insurance license to sell them.  No securities licensing or training.  So they cram every last dollar seniors have into them.  Yet securities people are being blamed by a populace that is ignorant about the industry.

What politicians and partisans constantly do is confuse MORE regulation with BETTER regulation, and that's precisely what we have here.
.


----------

