August 17, 2015

You all remember Harry and Louise from the 90s when the Clinton administration was trying to get a comprehensive health care reform bill passed? If not, here's a refresher for you.

The ad at the very top is being run on MSNBC and other channels by "Secure Families." This one suggests that this poor couple won't be able to get financial advice from their very trusted stockbroker because of the mean, mean government.

Michael Hiltzik at the LA Times debunks this one:

The new campaign is sponsored by Americans to Protect Family Security, a front for the life insurance and financial advisory industries. Its target is a proposed new Department of Labor regulation to simply require that the sellers of annuities, life insurance, IRAs, 401(k) investments and other such retirement products place their clients' interest first.

The clients' interest must come before that of the salespeople, or the firms paying them salaries or commissions to steer clients to investments that may not be right for them. That means they must act as "fiduciaries," to use the legal term. The idea is to ensure that the advice customers seek will come unadorned by the self-interest of the seller.

The explosion in self-directed retirement savings has made this a big deal. Labor Secretary Thomas Perez says that conflicts of interest in the retirement security industry cost IRA investors $17 billion a year. (The Department of Labor's fact sheet on the proposal, which it hopes to implement by the end of the year, is here.)

These conflicts, Perez told a Senate committee last month, "reduce returns for affected savers by about 1 percentage point per year"--which could reduce the victims' retirement nest eggs by more than a quarter over 35 years of savings. And this happens out of the victims' eyesight, because the industry relies on confusion and opaqueness to conceal its conflicts from the public. Under the DOL regulation, the department and aggrieved customers alike would have the right to enforce the rules.

Read on...

I've worked as a third-party retirement plan administrator for a long time. This rule does not hurt consumers; it protects them, which of course means Armageddon to the insurance and securities industry, don't ya know?

I'm pretty sure this one isn't going to have the same impact that the Harry and Louise ad did, simply because what they claim is happening isn't really happening, and enough customers have been screwed by hidden fees and other conflicts of interest that they're wary of any ad that whines for the pitiful stockbrokers.

Still, it's a stinky ad and one that should be taken off the air for sheer lying nerve.

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