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New investment rule could save investors billions

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Investors who like me were/are hesitant to engage a financial planner or other advisor, might find that a new ruling validates that hesitance. It seems there have been losses due to conflicts of interest. It looks like a rule codifying Financial Advisors to act only oin the interests of their clients is getting flak from them. Hmmmmm.

 

Excerpt:

 

"On Wednesday, the Obama administration announced a new rule on investment advice that may change how millions of Americans choose their retirement investments — potentially saving them billions of dollars in the process.

 

By requiring all financial advisors to act in their clients' best interests, a criterion known as the fiduciary standard, the rule aims to protect investors from conflicted investment advice when they are exiting a workplace savings plan like a 401(k) and transferring their money into an IRA.

 

"American families are losing billions of dollars because of an out-of-balance system," said Labor Secretary Thomas Perez in a news briefing. "With the finalization of this rule, we are putting in place a fundamental principle of consumer protection in the retirement landscape."

 

The rule will take effect in stages beginning in April 2017, Perez said. But that time is unlikely to pass quietly, not least because various financial industry groups have vowed to fight the rule.

 

According to an estimate by the Council of Economic Advisers, a worker who rolls over 401(k) savings to an IRA at age 45 and followed conflicted advice could have 17 percent less savings by the time he or she reaches age 65. In all, it estimated that conflicted investment advice currently costs savers roughly $17 billion a year.

 

Opponents of the rule say that estimate may be woefully high, yet David Certner, legislative policy director for government affairs at AARP, thinks the cost could be even greater because the council did not examine conflicts in the insurance market.

 

Some 75 million families have a workplace retirement account, an IRA, or both, the council found, and savers often transfer hundreds of billions of dollars from accounts like 401(k)s into IRAs every year. As defined contribution plans become even more widespread, rollovers will as well.

 

If savers receive advice at that point that is truly in their best interests, they stand to retain more of their money, at least in theory.

 

But current regulations allow advisors to suggest certain investments if they are "suitable," even if it means higher fees or lackluster performance for the investor.

 

"Both your doctor and your lawyer are obligated to look out for what is best for you," said Perez. "If you had an illness or cancer, you wouldn't want your doctor to tell you what's suitable for you."

 

The new rule comes after years of fierce wrangling over its terms. Large financial services firms and their advocates, like the Securities Industry and Financial Markets Association (known as SIFMA), figure prominently in the opposition. Among the advocates are consumer groups, AARP and the Financial Planning Coalition, a group that includes major financial planning organizations."

 

There is much more in the article along with hot links to related articles here: http://www.csmonitor.com/Business/2016/0409/New-investment-rule-could-save-investors-billions

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With you on this one also. I am amazed that the vast majority of retirees and others wont take the time to learn how to manage their money and therefore trust a FA to do right for them.

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More good data on this subject presented in this research paper:

 

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2739170

 

Abstract:

 

We construct a novel database containing the universe of financial advisers in the United States from 2005 to 2015, representing approximately 10% of employment of the ?finance and insurance sector. Roughly 7% of advisers have misconduct records. At some of the largest financial advisory ?firms in the United States, more than 15% of advisers have misconduct records. Prior offenders are five times as likely to engage in new misconduct as the average ?financial adviser. Firms discipline misconduct: approximately half of financial advisers lose their job after misconduct. The labor market partially undoes ?firm-level discipline: of these advisers, 44% are reemployed in the financial services industry within a year. Reemployment is not costless. Following misconduct, advisers face longer unemployment spells, and move to less reputable ?firms, with a 10% reduction in compensation. Additionally, ?firms that hire these advisers also have higher rates of prior misconduct themselves. We found similar results for advisers of dissolved ?firms, in which all advisers are forced to find new employment independent of past misconduct or performance. Firms that persistently engage in misconduct coexist with firms that have clean records. We show that differences in consumer sophistication may be partially responsible for this phenomenon: misconduct is concentrated in firms with retail customers and in counties with low education, elderly populations, and high incomes. Our findings suggest that some firms specialize in misconduct and cater to unsophisticated consumers, while others use their clean reputation to attract sophisticated consumers.

 

---ron

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Pareto Principle https://en.wikipedia.org/wiki/Pareto_principle

It applies to everything. 20% of any group will have ethical issues 80% won't. But trying to distinguish who is good and who is bad requires that you know as much about it as the good ones. It's like being able to recognize you are stupid requires the same skillset as those who aren't stupid already possess. John Cleese describes it in this video: https://www.youtube.com/watch?v=wvVPdyYeaQU

 

I find it bizarre, even a bit alarming, to find the representative groups for a profession claiming to be acting in our best interests, to object to taking responsibility for avoiding conflicts of interest that screw the client out of quite a bit as the whole article explained in depth.

 

Learning does not have to include learning the whole market and every high risk manipulation like shorting etc. I took my interest in alternative tech solutions to oil based transportation and broadband and had been following Musk as a PayPal guru, then discovered him in 2003, seven years before I could invest. I posted here and then learned about SpaceX and started following that too! I grinned at the knee jerk reactions here and elsewhere. The surprising thing is how afraid some people are of change that they don't have to do themselves. I read everything online about Tesla, Space X, and Musk.

 

Every bit of the actual facts exceeded 80% of people's capacity to believe. Those poor people, their spirit is bankrupt. Every person who knows more than they do is a con man, or resented and called names. Amazing behaviors come from people who feel like a cornered rat when confronted by the new, the exciting breakthroughs.

 

I didn't know squat about the market, and learned just how much fear motivates people's investing, and how they are manipulated by others who know how to scam them to buy a pump and dump, or sell a stock the advisor's company is shorting driving the investor's stock value down artificially. And they make millions.

 

Folks claim expertise that have none and to know that you have to know more than they do.

 

When it came time, finally, to be able to invest in Tesla, I'd been holding a large sum, for me, to buy shares in Tesla and hold them until the Model S was done and re-evaluate my position, and I did with my next re-eval in 2020. I regretted having taken out a fifth of my share and a small token profit. But now realize that I'm free of the greed and the fear. For now, my capital gains are in the thousands of percent because I bought two more small $10k blocks at $135 because I had nowhere else I wanted to put it in Jan 2013.

 

Our investment in funds are my wife's 401k that we rolled over in 1999. I can't get her to change again so we'll let her do it the normal way. But since all is paid off save a bit for the new house soon to be paid off, we accrue more discretionary funds having only food clothes and fuel to pay over and above our basic utilities including 100mbps broadband for 60 a month.

 

Putting all my stock eggs in one basket has worked out very well for me. Disregarding the folks claiming I was being foolish by paying cash for everything has also worked out well. I've also been, and remain, personally and passionately involved with Tesla and Space X, which is still frustratingly privately held. I want to invest before they build the LEO communications constellation, which will be soon I think.

 

I like the idea of holding accountable the CFAs and anyone calling themselves a financial advisor. You'd think their associations would too. I can't wait to hear the claptrap they come up with for that.

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I wish it was only 20%! If they have to recommend what is suitable and not what is the best investment for you,

that is a big issue. Say there are two investments that you could put your money in and one wouldn't provide a commission to

the financial advisor and the other came with a 4 or 5 % commission for the advisor, which one of those investments would they recommend?

This law change only applies to certain types of retirement accounts and not all financial advice.

I can only recommend that people use fee paid financial advisors who will review your financial conditions and give you a plan for you to follow

and they are not holding your retirement funds. Good Luck

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In general I usually oppose more regulations, especially where added costs to regulate or enforce are in play. I believe it is up to the individual to take responsibility and due diligence when it comes to investment.

 

And even though some Financial Advisors may have higher fees, and or associations with insurance options, that does not necessarily mean they're dishonest - or should be avoided. IF the FA's provides higher returns and or competent and appropriate forms of insurance, they can be the right FA for some clients.

 

For example. I had planned to set up our retirement investments by myself, and then administer them for the foreseeable future. I had already started getting quotes on Long Term Care and Term, Whole, Variable Life Insurance policies. When I first sat down with my DW to review what/where/why I was planning to do. She got very nervous and scared. (Took awhile, but finally after taking a few days break, and then regrouping over a glass of wine. What came out was that she was not really afraid that what I was doing was wrong. Her fear was that if something happened to me, she was terrified that she would not know what and how to take over.)

 

So, I took another month and looked over the impact of higher fees related to a FA that we could work with. It still penciled out that we could retire as planned, admittedly with I planned for a 5% less drawdown to cover the FA's costs as well as a bit more contingency.

 

I did what I assume many of you have done before. I interviewed many FA, networked with many of my friends and some of the same mentors I had had in my professional life, that were in some cases now into their 20th+ year of retirement. I ended up going with a FA who was in his mid 30's, and also had affiliation with New York Life. He was working with about 45 people that I personally knew from work, and about another 100 that I did not know, but were also from my company. Some were still working, as we were, others had been retired and working with this gent for 15 years. (He started at age 21.)

 

I retained a small portion portfolio to remain personally active in the market. But the bulk has been spread to what the FA and I agreed to. We meet yearly, and tune (Fourth year now behind us.). I also bought LTC and a hybrid cash accumulation Life Insurance policy on myself from the FA. (I was down to between NYL and Mass Mutual for insurance, and the quotes between them were close enough for me to give the full business to my now FA. And why not? Someone somewhere is going to get a piece of the action, might as well be my FA.)

 

After my yearly review with the FA, we then have a follow up mini review with my DW and my now mid 30's daughter too. (She is the executor of our Trust, and I look at this as a learning opportunity for her.)

 

So, for us, and the comfort to my wife, the higher costs of using the FA - is the cost of allowing us to have retired at under 60 of me, and 55 for my wife. She would have kept on working, just to avoid this phase of our financial life - as it scares her so much, that she sometimes would not sleep at nights as she knew I was pushing for us to get out and get going while we had our health.

 

Again, I understand the rationale of these new changes, and yes their are predators amongst us. But I suspect these changes could also impact those of us that want to use a FA. As the FA's population of higher quality advisors will drop, if they are not allowed to charge the higher fee for their hopefully superior advise.

 

Each of us can come at this from different directions, and that does not make it wrong for some to pay more for financial advice...

 

Best to all,

Smitty

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Smitty,

How would being compelled by law to not act only on what is suitable, but rather to recommend what is in the client's best interest cause FAs to not be available?

 

"By requiring all financial advisors to act in their clients' best interests, a criterion known as the fiduciary standard, the rule aims to protect investors from conflicted investment advice when they are exiting a workplace savings plan like a 401(k) and transferring their money into an IRA."

 

How would an honest broker be negatively affected by that? I consider any conflict of interest not disclosed to me by any advisor in anything to be lying by omission.

 

I know I'm an odd duck out because my retirement is taken care of and we have other income both earned and unearned before we even take our first SS check. Our problem now is the accumulation of excess cash and where to put it so we have taken to letting it sit in our savings until our next major project or purchase like a car purchase, or, as now, having custom decks and roof extensions over them added to the new house. IN between buying blocks of Tesla when it is down to under $140. The last block we bought at 135 is almost doubled in three years. 33% a year is good enough for me. I anticipate in 2018 to see a really doubling of my holdings when they world realizes what is actually happening. Remember I've already made a profit on Tesla thanks to your advice.

 

Since I don't use an FA why would you think it would affect the honest brokers?

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Here is the problem with a so-called financial advisor or planner. There is really only about 3 things they can put your money into. Stocks,bonds & REITs (real estate investment trust), which trade on the major stock exchanges, but are different. The Total Stock Market Index, called the Wilshire is about 6500 different stocks. All traded in a market run by professional money managers. So, any advisor you hire, has to compete against other professional money managers. Who typically have an MBA from Harvard, Wharton, Columbia,Duke, Cornell or U of Chicago (opps, left out Stanford and Northwestern). But, the reality is these people all are very intelligent (on standardized tests anyway) and work in an extremely competitive environment. About 80% of the US stock market is controlled by institutions, who have hired a professional money managers. Much of the 20% left is owned by people who can't just sell, because they own a major hunk of the shares outstanding, and this would lead to a significant drop in share price. People Like Bill Gates, Larry Ellison, the Walton Family (owners of Wal-Mart) are examples. There are many people in this situation.

 

So, there you have it. The US stock and the US bond market are run by professional investors. So, you can hire one to try and

compete, or just buy index funds that invest in the whole US stock and/or bond market. There are also index funds for REITS

and International investing. Invest for the long term and save the money you would have paid a so-called financial advisor or planner.

When you add up the 1.5 to 4% you pay a financial advisor a year, over many years, it is a lot of money. Using index funds also

eliminates the conflict of interest, every investor has with a financial advisor.

 

Just another thing to mention, I was taught a concept called the efficient portfolio hypothesis. It was a very complex and supposedly

sophisticated method to invest. Typically a portfolio would be 60% US stocks, 20% US bonds and the rest international. REITs were

not in the model. Even though they are a good way to diversify. This concept has not worked very well. I don't think it is taught anymore. But, a 50 to 60% US stock, 20-25% US bonds, maybe 10% International (an Index fund like total world market) and 10%

in a REIT index mutual fund is as good a guess for asset allocation as any. People can invest themselves. No load mutual fund

companies (Vanguard, T Rowe Price & Fidelity) can help a great deal.

 

 

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Smitty,

How would being compelled by law to not act only on what is suitable, but rather to recommend what is in the client's best interest cause FAs to not be available?

 

"By requiring all financial advisors to act in their clients' best interests, a criterion known as the fiduciary standard, the rule aims to protect investors from conflicted investment advice when they are exiting a workplace savings plan like a 401(k) and transferring their money into an IRA."

 

How would an honest broker be negatively affected by that? I consider any conflict of interest not disclosed to me by any advisor in anything to be lying by omission....................................

 

 

 

Suitability is a lesser standard, but easily applied. Basically, my reading is that the investment can be suitable the determination......is based on the losses that you can sustain.

 

A requirement that you act in the clients "best interests" is really subject to interpretation. For many small investors, that will mean "acceptable investments" even if they are bad news for the client. For example, RV would never get a financial advisor to approve his financial strategy under the new law. "EVERYBODY" knows your suppose to diversify your investments. So under the new law RV would probably have financial advisers drop him because of his concentration orientation.

 

If you want to get rich, you concentrate...not diversify. If you want to hold on to your money, you diversify. Which is why the rich always diversify...they are already rich.

 

I suspect in the long run the new law will probably not change financial advice much after the first set of panic by financial advisers. I once had a client that had a very high income and no assets. The ONLY investments she had were limited partnerships. She really did not want to learn the basics of investing. However, you spend hours and hours working at your job to earn those dollars and then throw them away because your unwilling to spend a small amount of time to learn the basics of investing!!!

 

My advice. Learn the basics of investments. Your investment advisor should understand tax laws. Because of "regression to the mean" you will always make more money understanding and using the tax code to your advantage.....than picking the perfect investments.

 

If financial advisors need to disclose anything it is their commission schedule. For most investments, the commission schedule is inverse to the average clients interests. It isn't very hard to track down the commission on most financial products and transactions EVEN if they are hidden from the consumer.

 

I have lost interest in investing.....I am reaching that inflection point where I have "more money than time". May you be blessed in both those catagories.

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I still think that the folks wanting to use an advisor should have some protections against conflicting advice. And an explanation of suitable versus actually in their interest.

 

Interesting post DogFather, thanks!

Edited by RV

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First, I do get long winded, and I do share my thoughts - because it was researching here (And maybe just a few other boards too:)!), that really helped me thru the thought process for my wife, and daughter, in our retirement planning phase of life.

 

Lets be clear. All FA's are not created equal. Right or wrong, FA's come at different pecking orders in the world of finance. Some have more, meaning not available to all, investment vehicles then others. These may costs more, using the COF numbers, but the Total Returns are also higher.

 

So my concern is that the new rules could cause some FA's to no longer feel free to recommend some investments at possibly a higher risk/rewarded with higher returns. I personally would like to make my own decisions on risk vs rewards, but if they will not feel safe to provide these options, due to regulations and possible penalties, the I would see this as negative.

 

I look both ways when I step off the curb, and make my own decisions on if it is safe to proceed. I've already shared my own personal opinion that I'm in favor of less regulations, and less cost of overhead to enforce/oversee them. (I believe in less overall 'Government', and thus lower overall costs/taxes to myself and my family.) Now I will be a bit of a hypocrite here, as I'd rather see more of my tax funds used to help educate citizens on finances overall, investments, budgets, credit card debt avoidance, etc. - so you see, I at least know I'm fractured in my thinking:)! I would rather see individuals have the ability, and the education, to take care of themselves. (Yep, again hypocritical, as I am using a FA primarily because I could not convince my DW to take the time to learn how to engage in this arena.)

 

And yes, I also read DogFather and appreciated his sharing his opinions too...

 

Best to all,

Smitty

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Smitty,

I appreciate your thoughts. As you know I have listened and appreciated your help here too. I see no issue with telling a client that something is suitable but has more risk and I make more on it, then have them sign a disclaimer and acknowledgement that you told the client that there are better investments. That already is awkward in that a bad conduct FA would definitely have trouble getting clients to buy what only makes money for the FA. Ipso facto less deceit occurs. IT won't eliminate all of it, but would not hurt the good guys from what I see.

 

But again we both have had a lot of fun with Tesla, in very different approaches. It is the fun that counts. IN other words, when I'm having fun, I end up with money to count. ;)

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According to an estimate by the Council of Economic Advisers, a worker who rolls over 401(k) savings to an IRA at age 45 and followed conflicted advice could have 17 percent less savings by the time he or she reaches age 65. In all, it estimated that conflicted investment advice currently costs savers roughly $17 billion a year.

And yet a savings of $63,000 is average and does not qualify one to even use a financial adviser:

 

 

How are we doing?

According to one study, the median balance of workers' retirement accounts — including 401(k)s, IRAs, etc. — is $63,000. By age group, the data looks like this:

  • People in their 20s have a median retirement savings of $16,000.
  • For people in their 30s it's $45,000.
  • For people in their 40s it's $63,000.
  • For people in their 50s it's $117,000.
  • For people in their 60s it's $172,000.

Source: Transamerica Center for Retirement Studies.

We're from the government and we are going to help you.

 

 

 

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This is a very relevant discussion. I have managed my investments though the years and have done OK. But I realize, at 77, I have gotten lax and just don't have the interest in keeping up with the market (one investment has never recovered from the crash and I didn't even know it until I woke up!). I am investigating an IA with Vanguard at 0.30% which is way below the average. My wife is worried that if I keep doing it myself, and if I go on to the beyond, she will be left with absolutely no idea what to do. Moneys will all be in index funds except I may demand some in CDs to be ultra safe. We have a second appointment with the advisor on Thursday to see what she has to say. I hate to give up control, but maybe it is time with an ultra conservative company (Vanguard) as I move into a later stage of life. I'm open to any comments.

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"In general I usually oppose more regulations, especially where added costs to regulate or enforce are in play. I believe it is up to the individual to take responsibility and due diligence when it comes to investment". ....not pickin' on you, but I suspect that position might change if it were your recently widowed Mother who was taken to the cleaners by some sleeze bag adviser. Everything she and my Dad worked for since the depression....gone. The only satisfaction we got was knowing he went to prison. Restitution ? Nope, he was broke by then.

IMO, there can never be too many regulations put in place which are designed to protect individual investors from predatory advisers. Do the actions of a few bad apples spoil the barrel...you bet.

 

Regards

Gemstone

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My FA was concerned about the proposal last year. It simply means "higher costs" in the long run.

It will put many FA's out of business.

And reduce returns to those who do invest with them.

 

It simply means higher costs - typical of government intrusion, no matter how well the intention.

 

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And yet a savings of $63,000 is average and does not qualify one to even use a financial adviser:

How are we doing?

According to one study, the median balance of workers' retirement accounts — including 401(k)s, IRAs, etc. — is $63,000. By age group, the data looks like this:

  • People in their 20s have a median retirement savings of $16,000.
  • For people in their 30s it's $45,000.
  • For people in their 40s it's $63,000.
  • For people in their 50s it's $117,000.
  • For people in their 60s it's $172,000.

Source: Transamerica Center for Retirement Studies.

We're from the government and we are going to help you.

I love reading threads such as this one, partly because we hear from so many investors who do so much better than any of the professionals can. It often leaves me wondering why the Warren Buffet's of the world employ professionals to manage their funds? Most working folks are far better off at the end of their careers if they simply join the 401k or IRA that is offered by their employers and stick with it, usually just ignoring the reports that they receive from the management company and even forgetting that there is money going into the fund. There is little doubt that some amateur investors do very well, but it is also a fact that many of them loose most of what they gain when things go bad and statistically the professional investment firms usually have a pretty good track record. Government intervention may have some good effects but historically it almost always increased costs and has some unintended consequences.

 

It is not possible to know what each of us who post here really have in terms of investment success to compare self-investment successes to the results of using a professional, but studies have shown many times that the numbers favor those using professional services. Threads such as this usually have a lot of interesting information and at least some good information but nothing can relieve the individual from the responsibility of his own risk assessment and final investment decisions. Nobody will do these things for us without cost and history has shown that your government will usually cost most.

 

Most of us want things both ways. Government created the IRA and the 401k and most of us would have very little to invest had those not been invented and made available but we also cringe at some other governmental involvement. While most of us are fairly expert in some field of endeavor, there are very few of us who know investing well enough to make the tremendous growth which is reported in some of the posts and some of us who could do so just prefer to pay someone else to do the job for us, because we prefer to make other use of our time.

 

My FA was concerned about the proposal last year. It simply means "higher costs" in the long run.

It will put many FA's out of business.

And reduce returns to those who do invest with them.

 

It simply means higher costs - typical of government intrusion, no matter how well the intention.

Remember, your government recently made your health care affordable....... Why be concerned now?

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"In general I usually oppose more regulations, especially where added costs to regulate or enforce are in play. I believe it is up to the individual to take responsibility and due diligence when it comes to investment". ....not pickin' on you, but I suspect that position might change if it were your recently widowed Mother who was taken to the cleaners by some sleeze bag adviser. Everything she and my Dad worked for since the depression....gone. The only satisfaction we got was knowing he went to prison. Restitution ? Nope, he was broke by then.

IMO, there can never be too many regulations put in place which are designed to protect individual investors from predatory advisers. Do the actions of a few bad apples spoil the barrel...you bet.

 

Regards

Gemstone

 

 

Nope, I do no feel differently. My MIL was also taken advantage of when she established two annuities that included a combined 16% or so cost to enter... When I found out, I went in and talked with the Manager of the place that guided her about how 'inappropriate' this had been for a lady in her then late 60's. After some good conversation, I asked him if it was his Mother - would he have wanted his employee to have established the same high costs annuities for her? He said no. So then it was just a matter of figuring out how much of a refund she would receive. (She was refunded $11K.)

 

So I sure understand that this can happen. But it's the same thing when buying a car, or a stereo, or obtaining work on your home. While I do go out of my way to try and identify and help correct what I feel is just wrong/not fair business practices. I still do not want 'price fixing' on all of these items.

 

Same thing with what I choose to eat. I do not want regulations telling me what/when/how to eat foods.

 

I do not like to hear about anyone being taken advantage of. But I feel the risks of regulations and legislative changes are too high of a price to pay. And I understand those that disagree with my opinion, and respect and defend their right to differ from my way of thinking:)!

 

Best,

Smitty

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I do not like to hear about anyone being taken advantage of. But I feel the risks of regulations and legislative changes are too high of a price to pay. And I understand those that disagree with my opinion, and respect and defend their right to differ from my way of thinking:)!

Agreed! You simply can not protect everyone from everything and in the effort you always take things away from everyone. My elderly parents were cheated by an unethical car salesman, but I still do not advocate governmental protections.

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Just saying FWIW:

 

If as often stated "90% of fund managers perform at worse than the S&P500 Index", why wouldn't one just put that portion of their funds into a low MER cost Index Fund? I've often wondered? Fear of loss is a far great motivator than the opportunity to gain, so fear for the most part drives the majority in their decisions it appears.

 

Likewise, we spend so many years so busy working hard for our monies to just hand them to some so called "advisor" not truly understanding for the most part what they are doing with it. "Trusting their knowledge, skill levels and abilities are far superior than our own to get a growing return over time". On a personal level, we've never, ever found an F.A. whether in the UK through Standard Life and others or here in Canada through Manulife and others that has performed anywhere close to the index fund equivalents, and in the process paid huge management fees on front/rear load funds = thinking ignorance was bliss at the time. With continually after several years much lower balances than what we contributed in took bull by the horns and made the effort to read and digest more and more about couch potato style investments, and over time leading to direct trading as interest grew.

 

On the premise of people do business with people they know, love and trust = how many of these sleezy referenced "so called advisors", did the folks that got burnt, not feel that way at the front end based on what they were told/experienced initially?

 

With regards to more government mandates on fiduciary duties - past experience in other industries that have become more mandated in this regards, have taught us that, they will abide "technically/legally and supposedly ethically", but things will typically be presented (remember Fear Factors!) in such a way as to cover their butts but it is highly probable that gentle persuasion/direction will still lead to that which is most beneficial to the advisor. I still feel strongly that only the very "astute" individuals who know how to ask the exact right questions, and re-question until a "definitive answer and not glossing over is received, will benefit from ongoing adjustments to mandating.

 

As Kirk so aptly put it: You simply can not protect everyone from everything and in the effort you always take things away from everyone.

 

FTW.

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Some of us will have to agree to disagree. Not everyone uses an FA, not everyone doesn't. Thanks for your input guys and for some it IS the right choice.

 

Just not me.

 

My son's best friend is an FA, and he told my son to stay away from Tesla when we first bought in on IPO. A couple of years ago when I bought another $10k block at $135 after a drop from $270 or so, he talked like buying more will be a big mistake. Gave me the "You poor ignorant old guy" look. :lol: Kids! That time my son listened to me, and is glad he did.

 

I'd be more inclined to use the paid for Motley fool Investment advice.

 

On the other hand, I have five more fingers. ;)

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I generally think less regulation is better. However, with so few pensions offered today there will be a great need for people of varied backgrounds and education to make major financial decisions. My dear Mom hired a financial advisor years ago that did very well for her. Then the company sold but Mom was well in her eighties then and financial business confused her. After a few months of confusing statements she asked me to look at it. The new advisor was buying and selling mutual funds every month and through fees she lost a considerable amount. This guy even made it as difficult as posible for Mom to close her account. This guy was scum but Mom might not of had this nest egg had the first advisor not been able to do what she did. I am torn but my experience is more government regulation to stop a few bad apples causes new problems and is frequently not better for most.

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Each of us have the right to do with our money whatever we wish and we can make any statement of success we wish as well since nobody can verify what we say. For that reason I'll not bother to make any claims to success, but as one who has passed the point of required annual withdrawals, so far my funds have grown each year more than the amount of our required withdrawal, so I'm satisfied. There are things in life which are far more important to me than making more money. I've been to enough funerals to know that nobody can take anything with them when life ends so I'll use my time in ways that are much more important to me, with no resentment from paying for the work and expertise of my fund manager. :)

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