Chalk it up as another win for the insurance and securities industries.
Senator Chris Dodd, Chairman of the Senate Banking Committee, caved to special interests groups in March, removing the requirement for ALL financial advisors to place the interests of the consumer ahead of their own.
Proponents for a fiduciary standard for ALL financial advisors (including this blog author) view the decision as the result of misleading information provided to the committee from the insurance industry and "Wall Street." This is nothing new. Wall Street and the big insurance companies have long been in bed with each other. They both are interested in what products they can sell people that will earn the seller big, fat commissions, with little or no worry as to whether the product is the right fit or not.
Look no further than the U.S. Federal Government this past week slamming JP Morgan with a lawsuit that they misled investors regarding certain mortgage products that they sold. No way. Really? Not a Wall Street brokerage firm. Yes, really.
It seems like Senator Dodd's committee should look again.
"Insurance agents were 'worried about the sales of their high cost and often misleading annuity products,' if forced to be held to a fiduciary standard," said Babara Roper, director of investor protection for the Consumer Federation of America. Well, there you have it, we would not want insurance agents and brokers to have to actually quit earning 10% commissions on products that offer uneducated and uninformed investors a "free lunch."
From the beginning of mankind, the emotions of greed and fear have ruled inside one's brain. As long as investors keep looking for a free lunch, there will be insurance agents and stockbrokers, ready, willing and able to meet the demand.
INVESTING LESSON Same old boring thing: There is no such thing as a free lunch.
NOTE: Regardless of which political party has/is, or will be in control, the lobbying efforts of special interest groups all too often win out over the needs of the U.S. consumer. I am equally confident that had a Republican been in charge, the same poor outcome would have still been the result.
Senator Chris Dodd, Chairman of the Senate Banking Committee, caved to special interests groups in March, removing the requirement for ALL financial advisors to place the interests of the consumer ahead of their own.
Proponents for a fiduciary standard for ALL financial advisors (including this blog author) view the decision as the result of misleading information provided to the committee from the insurance industry and "Wall Street." This is nothing new. Wall Street and the big insurance companies have long been in bed with each other. They both are interested in what products they can sell people that will earn the seller big, fat commissions, with little or no worry as to whether the product is the right fit or not.
Look no further than the U.S. Federal Government this past week slamming JP Morgan with a lawsuit that they misled investors regarding certain mortgage products that they sold. No way. Really? Not a Wall Street brokerage firm. Yes, really.
It seems like Senator Dodd's committee should look again.
"Insurance agents were 'worried about the sales of their high cost and often misleading annuity products,' if forced to be held to a fiduciary standard," said Babara Roper, director of investor protection for the Consumer Federation of America. Well, there you have it, we would not want insurance agents and brokers to have to actually quit earning 10% commissions on products that offer uneducated and uninformed investors a "free lunch."From the beginning of mankind, the emotions of greed and fear have ruled inside one's brain. As long as investors keep looking for a free lunch, there will be insurance agents and stockbrokers, ready, willing and able to meet the demand.
INVESTING LESSON Same old boring thing: There is no such thing as a free lunch.
NOTE: Regardless of which political party has/is, or will be in control, the lobbying efforts of special interest groups all too often win out over the needs of the U.S. consumer. I am equally confident that had a Republican been in charge, the same poor outcome would have still been the result.
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