SEN ELIZABETH WARREN D MA is after the bank-financial cabal on wall street again, fueling their absolute hatred of the woman who is not afraid to take on the 1% and the politicians their money controls. Not only is she fighting to protect and expand Social Security she is defending a Dept of Labor proposal to ban kickbacks from financial companies to retirement plan financial advisors, the people who are supposed to guide you to make the best choices for investing your retirement funds. "The new Department of Labor rule is pretty radical: It tells financial advisors that they can only provide their clients with retirement planning advice that is in their best interest". The republican / tea-bagger response? " House Republicans are trying to block it by attaching policy riders to appropriations bills. "We’re going to do everything we can to make sure that this rule is not implemented," said Oklahoma Republican Rep. Tom Cole ". Still wondering who the republicans and tea-baggers are really looking out for? This from +Daily Kos .....
In return, Warren is using a new report to expose the kinds of practices—which are entirely legal!—that these financial companies engage in. One example is using kickbacks, including things like expensive vacations, gift cards, and various activities to encourage advisors to recommend inferior annuity products.
The study, called "Villas, Castles, and Vacations: How Perks and Giveaways Create Conflicts of Interest in the Annuity Industry," points out that loopholes in various rules from the Securities and Exchange Commission, the Financial Industry Regulatory Authority, state insurance departments, and other agencies allow this practice to continue. The tainted financial advice costs Americans about $17 billion every year. To get a sense of the prevalence of these perk-induced conflicts of interest, Warren's Senate office wrote to 15 leading annuity providers, asking whether they offered non-cash incentives, including vacation trips, cruises, and dinners, to annuity sales agents for promoting their financial products. Often, agents have to hit multi-million-dollar sales goals to trigger giveaways, so the letter also asked these companies about their protocols for disclosing sales incentives to annuity purchasers. Warren began the investigation in April, a few weeks after the Department of Labor proposed a rule to help curb conflicts of interest in annuity sales.
None of the companies, says the report, provided complete answers to Warren's questions, but "the responses nonetheless reveal a widespread practice of offering agents kickbacks in exchange for promoting certain annuities…and that such kickbacks are effectively concealed from customers." Thirteen of the 15 companies contacted by Warren's office admitted to offering perks either directly to sales agents or indirectly through third-party providers. Some of the top perks included a 30-day trip around the world for two, a week in Bora Bora, a trip to Monte Carlo, and a week in Rome. Beyond vacations, Warren's office heard from companies that they offered items such as iPads, golf outings, jewelry, dinners at expensive restaurants, and sports tickets.
This is in the annuities market, where retirees are going for advice
on how to invest to maximize their retirement savings, and, you know,
afford retirement. One would think that would be the priority of their
financial advisors as well. It hasn't been, to the tune of $17 billion
annually.
Republicans had probably hoped to have this fight in the background, and to try to slip it through in the massive and critical spending bills that are supposed to be working their way through Congress by the December 11 deadline, when the current funding for the government expires. Warren, however, isn't going to allow them to be so sneaky in screwing over retirees.
Republicans had probably hoped to have this fight in the background, and to try to slip it through in the massive and critical spending bills that are supposed to be working their way through Congress by the December 11 deadline, when the current funding for the government expires. Warren, however, isn't going to allow them to be so sneaky in screwing over retirees.
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