One who intends to leave others better off for his having existed.

3/4/15

"Obama to Push for Tougher Broker Rules on Retirement Funds"

"The Obama administration is picking a fight with Wall Street over the handling of Americans’ $11 trillion of retirement savings, accusing brokers of skimming significant sums annually from small investors and urging new protections against biased financial advice.

The White House on Monday plans to throw its full weight behind a Department of Labor proposal to make it harder for brokers to push higher-fee mutual funds or other expensive products on people saving for life after work. The plan would require brokers to act in a customer’s best interest, a change that could limit the earnings of financial advisers.

...“The outdated rules create an unfair playing field making it hard for good advisers to compete, and making it harder for working and middle-class families to know who they can trust,” Jeff Zients, director of the White House National Economic Council, said on a conference call with reporters Sunday. He was joined by other administration officials and John Bogle, the founder of mutual-fund company Vanguard Group Inc.

Obama is scheduled to tout the Labor Department proposal at an AARP event Monday along with U.S. Senator Elizabeth Warren of Massachusetts, whose popularity has surged among Democrats based on her claims that bankers and the financial industry too often try to take advantage of workers.

Officials declined to outline specifics of the plan to impose a standard known as a fiduciary duty, which will crack down on “backdoor payments and hidden fees” earned by brokers...

...At the heart of the proposal is an effort to tighten the legal standard for brokers handling retirement funds in individual retirement accounts and 401(k)s, which now hold more than $11 trillion. Under current rules, brokers can sell any product that is “suitable” for an investor, meaning it fits the client’s needs and tolerance for risk.

...Clients lose as much as $17 billion a year from such conflicted advice, according to the Obama administration.

“The corrosive power of fine print, hidden fees and conflicted advice can eat away like a chronic illness at people’s hard-earned retirement savings,” Perez said.

...Investors are particularly vulnerable to conflicts of interest when moving investments from an employer-sponsored 401(k) plan to an IRA, the White House said. That process allows brokers to steer investors into products that earn them higher fees."

http://www.bloomberg.com/politics/articles/2015-02-23/obama-to-lead-push-to-toughen-broker-rules-for-retirement-funds

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