WSJ: The Nanny Financial State- Labor strips workers of financial guidance.

[George Gervin's Afro]

It seems to perturb GGA that anything should have to be discussed on a discussion board. He also seems to resent others for seeing things differently than him.

The instantaneous resort to insult is a tell, but making agreement with him the criterion of intelligence is an even more basic sign of immaturity IMO.

wow that was deep man..

[Winehole23]

You call people idiots for merely disagreeing or otherwise not reading your mind, when your posts are sometimes less than completely clear. How would you describe that?

[Aggie Hoopsfan]

pass a law that requires an idependent financial advisor...

Awesome, another law requiring me to do something with my own money.

You're definitely a sorry nanny stater lib, but at least you're consistent...

[ElNono]

I don't necessarily disagree with this. Anything that pushes people to educate themselves on finance and how to manage their money is a good thing. The average Joe that doesn't really understands investments and thus blindly follows an advisor shouldn't be in the investment market anyways.

[Winehole23]

The average Joe that doesn't really understands investments and thus blindly follows an advisor shouldn't be in the investment market anyways.

Used to be called due diligence, i.e., checking for yourself, getting second-, third- and even fourth-opinions and generally educating yourself about what you invest in.

I think it used to be commonplace, but I could be wrong about that.

[ElNono]

Used to be called due diligence, i.e., checking for yourself, getting second-, third- and even fourth-opinions and generally educating yourself about what you invest in.

Yes, but it has gotten to the point where people are too lazy to do their homework, and the market has been sold by these same investment firms as the panacea that keeps on giving. So even average joe wants to be in on it, even though they know jack about it. They only find out when their investments went down the drain.

[coyotes_geek]

I don't necessarily disagree with this. Anything that pushes people to educate themselves on finance and how to manage their money is a good thing. The average Joe that doesn't really understands investments and thus blindly follows an advisor shouldn't be in the investment market anyways.

People do need to educate themselves. But the government stepping in and telling people who they can and can't get advice from doesn't do anything in that regards.

[ElNono]

People do need to educate themselves. But the government stepping in and telling people who they can and can't get advice from doesn't do anything in that regards.

Actually, the government is simply telling them who they cannot get advice from. There's plenty of financial advisors out there, including none if you know what you're doing.

[coyotes_geek]

Actually, the government is simply telling them who they cannot get advice from. There's plenty of financial advisors out there, including none if you know what you're doing.

So you think people come out ahead by the government restricting their options? There are plenty of financial advisors out there and none of them work for free. All of them have a financial stake in this somehow. Why is it only the guy who works for the company administering my employer's 401k plan who can't be trusted to give me advice? But it would be okay for that same guy to give you advice. That just makes no sense.

[ElNono]

So you think people come out ahead by the government restricting their options? There are plenty of financial advisors out there and none of them work for free. All of them have a financial stake in this somehow. Why is it only the guy who works for the company administering my employer's 401k plan who can't be trusted to give me advice? But it would be okay for that same guy to give you advice. That just makes no sense.

It's not a matter of trust. It's a matter of conflict of interest because a lot of this stuff is part of a company's package that engulfs a lot of people that know absolutely nothing about investing. This forces people to actually seek out advice and inform themselves of before they go tossing their money away.

[spursncowboys]

The best financial adviser is Benjamin Graham. Safest too.

[RandomGuy]

The Nanny Financial State
Labor strips workers of financial guidance.

With very little media or public attention, the Obama Administration recently suspended a Bush-era rule to let employees get financial guidance from the advisers managing their 401(k) investments. The provision was designed to give average investors access to the kind of personal financial advice that is typically a privilege of the wealthy. Instead, they are likely to get no guidance at all.

The saga began in 2006 when bipartisan reforms to the Employee Retirement Income Security Act opened the door to greater personal financial services directed to the average investor. In 2008, the Labor Department proposed a rule to let the financial advisers who handle a company's 401(k) programs also provide financial guidance to employees. This means such well-known firms as Fidelity or Vanguard. The new team at Labor has now killed the rule out of supposed concern for conflicts of interest.

The claim is that because the advisers who run 401(k) and other retirement programs work with mutual fund companies and brokerages to sell investment products, they can't be trusted to provide investors with impartial advice. According to California Democrat George Miller, the rule would have "opened the door to unscrupulous advisers to make recommendations based on their financial stake and not in the best interest of workers."

Labor says it will issue an alternative rule, but we've been down this road before. When the investment guidance was being considered, two proposals were in play. The Bush Administration's plan allowed a company to hire a fund manager, and for the fund manager to provide investment advice as part of a package deal for the firm's employees. The plan had the advantage of being cost effective and easily used, with any potential conflict mitigated by disclosure and other safeguards.

At the time, the anti-Wall Street brigade led by Iowa Senator Tom Harkin insisted that advisers would inevitably "hoodwink" consumers into bad investments. They proposed that if companies wished to provide investment advice to their workers they be required to hire independent advisers, whose suggestions would supposedly be pristine and trustworthy. The costs of these outsiders would also be paid by the employer. That might be affordable for huge corporations, but the additional costs are prohibitive to many smaller businesses, which means most workers will end up having to fend for themselves.

Mr. Harkin is now back at it, this time as a committee chairman who wants to codify the new Labor language into law. The current Congress has already demonstrated its disdain for markets, but stripping employees of basic financial advice betrays outright hostility to the concept of individuals managing their own retirement investments.

http://online.wsj.com/article/SB1000...main#printMode

Interesting peice.

Let's put on our critical thinking hats.

I will start by highlighting a certain part of the URL that you might not see.

"...=rss_opinion_main#printMode"

I will then continue by asking the thread starter a fair critical thinking question:

Do you think you got a balanced and complete version of this event, with all the context necessary to make an informed opinion as to whether this event was positive or negative?

[coyotes_geek]

It's not a matter of trust. It's a matter of conflict of interest because a lot of this stuff is part of a company's package that engulfs a lot of people that know absolutely nothing about investing. This forces people to actually seek out advice and inform themselves of before they go tossing their money away.

People are already seeking out advice for themselves when they decide to pick up the phone and ask someone a question. Whether or not the person on the other end of the line works for the same company that administers their 401k doesn't change that. This conflict of interest discussion is a completely separate issue from people deciding to educate themselves. Someone who doesn't give a crap about educating themselves isn't calling anyone to begin with so the government stepping in to prevent them from being able to ask their 401k provider for advice does nothing to help them. All this does is hurt people who are trying to educate themselves by reducing their options.

[ElNono]

People are already seeking out advice for themselves when they decide to pick up the phone and ask someone a question.

And that is not what this is about. This is about the packages that financial firms offer to companies that include all-inclusive tiered investment packages for their employee's 401(k), and the advice they provide on those packages.

Here's a more detailed article on what's this about:
http://www.hrnewsnow.com/?p=535

And here's also the proposed law that's making it's way through Congress to address this:
http://www.govtrack.us/congress/bill...bill=h111-1988

[coyotes_geek]

Looks like we're at the point of agree to disagree. I just don't think there's an issue here so long as conflicts of interest are disclosed up front. Conflicts of interest are everywhere and I didn't see anything in that bill that will completely remove COI's from the equation. All it does is trade one source of COI for another source of COI while making government the overseer of how people are allowed to get their financial advice.

[George Gervin's Afro]

Awesome, another law requiring me to do something with my own money.

You're definitely a sorry nanny stater lib, but at least you're consistent...

You're right..we all know people weren't ripped off using financial investment advice that hurt them but helped the financial advisor.. never happens.


I guess I should try and get where your coming from. Are you stating that there are no conflict of interests when receiving financial advice? Shouldn't the investor know this? If they should know this and the financial advisor is not mandated by law to say anything then what? How is the financial advisor penalized when they lose all of your money? They may go to jail but your still out of luck...so are you ok with people getting ripped off?


I guess you know that the law does nothing to your ability to invest money don't you? I think you do but you;d rather be intellectually dishonest about it... no big deal

[George Gervin's Afro]

Looks like we're at the point of agree to disagree. I just don't think there's an issue here so long as conflicts of interest are disclosed up front. Conflicts of interest are everywhere and I didn't see anything in that bill that will completely remove COI's from the equation. All it does is trade one source of COI for another source of COI while making government the overseer of how people are allowed to get their financial advice.

Actually it would remove almost all chances of the possibility of conflicts of interests.