I love Obama!
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WASHINGTON (AP) -- The Obama administration on Friday is proposing regulations aimed at protecting workers' retirement savings.
The safeguards would protect workers from conflicts of interest on the part of financial advisers who manage their 401(k)s and individual retirement accounts, an administration official said, speaking on condition of anonymity because the proposal had not yet been formally announced.
The proposed regulations would require retirement investment advisers and money managers to either: base investment advice on objective computer models certified by independent experts; or refrain from steering workers into funds they are affiliated with or from which they are receiving a commission.
Vice President Joe Biden was to announce the proposal during a meeting of the White House Middle Class Task Force. Retirement security is among the task force objectives.
If the Labor Department enacts the proposed regulations, the rules would apply to all financial institutions that offer 401(k) programs to employers and offer financial advice to their employees. The administration says the protections would affect tens of millions of workers across the country.
I am certain this is part of why Jones rolled out Advisory Solutions. They are also rolling out a "model portfolio" buying system for A-shares, most likely to comply with the "computer model" regulation. It would allow you to input the amount the client wants to invest, all the criteria, and it will give you the various model options. I think this is good for clients of lousy brokers, but really minimizes our effectiveness. Once all the online firms start doing this, the big question will be, "why am I paying you 3.50% for the EXACT same process as what I can get online for free?"
Wouldn’t this affect companies that offer the 401k’s more than it would advisors who are managing assets that are on the outside ? Say a VALIC, Fidelity, Vanguard ?
Yeah, I charge 3.5% per year for Jones' most sophisticated model. No, I was just taking a $100K mutual fund A-share breakpoint, which is average for most mutual fund companies.You charge 3.5%?
"The safeguards would protect workers from conflicts of interest on the part of financial advisers who manage their 401(k)s and individual retirement accounts" Actually, many 401K providors are already rolling out age-based and objective based asset allocations, and I have recently seen a lot of 401K plans that offer dynamic rebalancing of individual MFD strategies for an annual fee (say 1.0%). Talk about capturing a lot of fees...An insurance-based group-annuity 401K that has a wrap fee, a separate TPA fee, underlying fund expenses, and then an advisory fee to the client??! All-in, you're talking about 3-5% in total expenses in some cases. I do agree, though, that 401K participants need to be protected from themselves.Wouldn’t this affect companies that offer the 401k’s more than it would advisors who are managing assets that are on the outside ? Say a VALIC, Fidelity, Vanguard ?
“base investment advice on objective computer models certified by independent experts”
So, this begs the question - Who are the independant experts? As far as I know, ALL of the "experts" work for some firm. Who's going to design the computer models? Here's my fear - I'll pick on Goldman for a minute. They have funds that are run by computer models. Anything in the GS fund lineup that has the word structured in it is one of those models. Here's a chart comparing their Structured LCV vs their LCV funds: Is this what our clients have to look forward to? I realize this is a very small sample, but active managment is sometimes about gut feelings and taking risks on a certain company. It's what makes some managers stars and others dogs. I just don't see that more government intervention will be a good thing. I'm also not a big fan of retirement date funds. Those type of funds don't take the 20+ years our clients are going to spend in retirement into account at all. So, their 401Ks are going to be allocated 100% to bonds and cash when they retire, just in time for us to tell them when they roll it over that they can't survive the next 25 years without some exposure to the market. That makes perfect sense. How about instead of mandating things about the advice they are given, you make basic asset allocation classes mandatory. If an employer has a 401k, they should be required to have their employees take a class on their life savings. I would venture to guess that most guys in this country know more about horsepower, bra sizes, and beer than they do their life savings. That's just pitiful.dont worry
Obama is done dems rats jumping off Obama titanic they dont even have 51 for reconciliation on healthcare dodd and bayh aint dumb...they see the hand writing on the wall feinstein next. blue doggies gone nov 2010 will be an amazing thing to watch senate GOP is a done deal independents gone i thought he was going to center liek Bubba did in 94 but after this healthcare circus....... dude is in denial. these dems aint gonna risk their jobs for him. you watch them back off. reid and nancy are done“I would venture to guess that most guys in this country know more about horsepower, bra sizes, and beer than they do their life savings. That’s just pitiful.”
And.....the problem with that is.....? A man's gotta live a little, ya' know?I would be the independent expert.
JK - Independent experts would be firms that don’t manage assets I would think.
Who would those be? Do we really want firms that don’t manage assets managing the largest pile of assets in the country?
My opinion is that if you're not smart enough to manage your money for your own retirment, you should hire someone, who earns commissions (let's not get into a semantics game about fees vs commissions), to do that job for you. If you're not smart enough to do that, you deserve to live a life of poverty. Isn't that the story of capitalism?[quote=Spaceman Spiff]Who would those be? Do we really want firms that don’t manage assets managing the largest pile of assets in the country?
My opinion is that if you're not smart enough to manage your money for your own retirment, you should hire someone, who earns commissions (let's not get into a semantics game about fees vs commissions), to do that job for you. If you're not smart enough to do that, you deserve to live a life of poverty. Isn't that the story of capitalism?[/quote]Verification through computer model isn't the same as managing assets. Those not managing assets are still not going to be managing assets. They have to sell their process just like anybody else.
But really, firms like mine can take advantage of this, because we don't receive compensation from the funds within the plan. We receive our compensation straight from the plan itself. Works out. This is great news for RIA's.
I’m sure EJ, if they have a company computer model for asset allocation, while have a third party sign off on verification - thus enabling any EJ FA to use it. I would be surprised if they want it certified on the account level - what since would that make?
I think this may affect my firm's 401k plan...if it goes into effect.[quote=Spaceman Spiff]Who would those be? Do we really want firms that don’t manage assets managing the largest pile of assets in the country?
My opinion is that if you're not smart enough to manage your money for your own retirment, you should hire someone, who earns commissions (let's not get into a semantics game about fees vs commissions), to do that job for you. If you're not smart enough to do that, you deserve to live a life of poverty. Isn't that the story of capitalism?[/quote] Spiff, lots of firms do this. It could be as simple as the 401K providor utilizing Morningstar to come up with the recommended allocations and mutual funds. The only problem with what yo are saying regarding paying someone is that, in general, most plans are already paying quite a bit between the group annuity "wrap" fee, the fund expenses, and the TPA expenses. Personally, I don't think a lot of providors offer much for what they are charging, other than a snazzy website. But the ultimate problem is that the wrong people are getting paid. In the case of the big firms (take Hancokc or Hartford for example), they are making a ton of dough on these plans, and sure, they provide a great website with lots of tools. But if it's a $1mm plan, and the advisor is getting 25 bips, let's say they are seeing $1,000 net after their firm's cut, that's not a lot to incent that person to go out and do lots of employee education. And what if the participants are spread all voer the place? It's even harder. Too many hands in the cookie jar, but not enough to any one element to make face-to-face education worth it. So ow with this regulation, there will be yet another added layer of fees to pay for the 3rd party "expert" to come up with allocations.I’m a political junkie and I’ve never seen anyone in the Presidency like this guy.What a joke- he doesn’t even behave like a president, imo. I think the country is waking up that Obama is bad news and somehow he has managed to buy into his own bullcrap and is convinced he got elected because people support his ideas, which they never have…He got into office because Americans were scared of the meltdown and pi$$ed off about all the money Congress and Bush spent so recklessly the previous 8 years and beyond.
What a disaster! The country will survive, but the questions remains at what price?[quote=oldpruguy]I’m a political junkie and I’ve never seen anyone in the Presidency like this guy.What a joke- he doesn’t even behave like a president, imo. I think the country is waking up that Obama is bad news and somehow he has managed to buy into his own bullcrap and is convinced he got elected because people support his ideas, which they never have…He got into office because Americans were scared of the meltdown and pi$$ed off about all the money Congress and Bush spent so recklessly the previous 8 years and beyond.
What a disaster! The country will survive, but the questions remains at what price?[/quote] When Obama was I elected I said that 10 years from now the country will remember Bush's presidency with more fondness than today. I remember the Reagan years and it wasn't until years later that he became 'one of the greatest presidents ever'. In fact, I remember a great deal of hatred for 'reaganomics' at the time. Clinton had his fair share of issues but even a GOP'er like me can admit he was overall a very good president. To that end, Obama has lost the halo faster than any president I can remember. Everyone talks about what a disaster the bush years were but 4 years in he was re-elected. Obama has alienated many people much faster than I would have thought possible.Obama agreed with the statement that putting part of a 20-30 year old social security into the market was too risky. And this is the guy making policy decisions. (The statement was from AARP who happens to market MF’s to its members).
Miller Wins Super-Combined for 1st Olympic Gold…<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Then Looses It to the Fastest Thing Downhill This Year!!
Bode Miller is stripped by the Olympic Judges after a late entry to the downhill race.
By Axle Rod AP Sports Writer
WHISTLERBLOWER, British Columbia February 21, 2010 (AP)