by Dave Blount | March 7, 2016 2:44 pm
While the primaries keep us entertained by degenerating into a circus act, the garrote around our throats continues to be pulled ever tighter:
The Department of Labor has proposed a rule that would restrict what advice a financial expert could give to employees, a move that would cost middle-class savers $80 billion in lost savings, according to a report from the Competitive Enterprise Institute.
In April 2015, the Labor Department proposed a rule that would give it regulatory authority over financial advice concerning Individual Retirement Accounts, known as IRAs. The rule would require that financial professionals who give advice about these retirement accounts only act in the “best interest” of savers.
“Best interest” as defined by federal bureaucrats, of course.
According to the report, the department claimed that the rule was necessary because individuals could not “prudently manage retirement assets on their own,” and that they “generally cannot distinguish good advice, or even good investment results, from bad.”
Since we are too incompetent to manage our own affairs, the same government that has run up a $19 trillion debt steps in to do it for us — on a coercive basis.
“Given the language in the rule, [the agency] may well believe it was drafting a ‘fiduciary rule for dummies,’ because it expresses doubt that savers can make wise investment choices in their 401(k)s and individual retirement accounts,” the report states.
The real dummies are those who keep voting to give the Leviathan still more power over our lives.
The rule, which puts government regulators in charge of what financial advisors can say or do to advise savers, has raised concern that this restriction will limit investment choices for consumers.
“It will be almost inevitable that financial service providers will restrict choices of investment vehicles and strategies and look for a ‘safe harbor’ of particular investments the government would bless,” the report states. According to the report, even center-left economists have said that the fiduciary requirement is a “vague open-ended obligation with seemingly no bounds.”
Companies that have paid Shrillary a quarter $million to give a speech are likely to regarded as safe harbors by bureaucrats.
The report asserts that the rule would cost middle-class savers $80 billion over 10 years in lost savings. It would prevent brokers from taking third-party commissions, so they would likely have to charge investors more to make up for the loss. Brokers may even stop servicing some portfolios because they are too small to justify the cost of a management fee.
For instance, in 2013 the United Kingdom banned third-party commissions, only to find that many brokers stopped servicing portfolios under $240,000 because the fees would not pay enough to service the account. Economists found that 85 percent of British savers lost their brokers or received reduced services. This led economists to project that American savers could lose $80 billion over 10 years because of the rule.
The overall cost of allowing government to exceed its constitutional bounds is incalculable.
Source URL: https://rightwingnews.com/freedom/federal-government-declares-us-unfit-manage-retirement-assets/
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