All $cum down there, even the "good" ones:
"Congressman draws fire for bill that would aid MassMutual" by Christopher Rowland Globe Staff January 05, 2016
WASHINGTON — The MassMutual office tower looms large over Springfield, a symbol of the powerful role the insurance company plays in the home district of Representative Richard Neal.
Now Neal is coming under fire for sponsoring legislation that would protect MassMutual — which is the veteran lawmaker’s biggest source of campaign money — and other insurance and financial services companies from regulations proposed by the Obama administration.
Neal and his cosponsors have introduced a watered-down version of the Obama administration’s plan to curb investment industry practices that critics say take an unfair bite out of Americans’ retirement nest eggs.
The Obama administration is taking aim at a conflict of interest for some brokers, who win hefty commissions to steer people with individual retirement accounts into complex investments with high fees and substandard returns. The White House estimates that Americans collectively lose $17 billion a year because they receive “conflicted advice” and wind up getting about 1 percent less in annual returns in their IRAs than they should.
But the reforms proposed by Obama’s Department of Labor have been fiercely opposed by insurance and mutual fund companies — including MassMutual, Fidelity Investments, and other major Massachusetts firms — that manage trillions of dollars in individual retirement accounts.
The lobbying fight has spilled onto Capitol Hill, where the Department of Labor has been criticized by members of both parties. Neal’s bill, which he filed with Republican Representative Peter Roskam of Illinois, is supported by the industry and is touted as a bipartisan compromise.
He's the most senior member of the state delegation.
Neal acknowledged in an interview Monday that having a hometown constituent, MassMutual, which manages $155 billion in customer retirement accounts, was part of his motivation for wading into the debate. But he pointed out that he has been working on retirement issues for decades and that his interests are far broader than a single company in his district.
He said he would be pleased if the introduction of his legislation prodded the Department of Labor to scale back its “unworkable’’ rules.
“I want the Labor Department to come up with a rule that’s workable,” Neal said. Its current draft, years in the making, “is cumbersome and overly complicated and is going to drive people away from retirement advice that need it.”
Why?
Related: Little action on Obama’s lofty gun control plans
What are those, tears for the millions he's murdered?
Neal’s legislation contains the same stated goal as the Obama administration reform plan: requiring that brokers keep the “best interest” of their clients at heart when offering retirement investment advice. It also forces brokers to disclose commissions they receive from insurance and investment companies for signing clients up for particular investments.
I was just wondering why they wouldn't have been?
Certainly not part of the economic $y$tem I was taught and told about.
But the Roskam-Neal bill lacks many of the strictest requirements for transactions between broker and client, such as a written contract between broker and client and a list of preapproved investments that brokers can discuss. Moreover, its passage would be a virtual death sentence on the Obama administration rules because it would require the Republican-controlled Congress to affirmatively approve the Department of Labor regulations — which is as close to a political impossibility as you can get.
Investor advocates are calling foul.
“It’s an industry wish list,” Barbara Roper, a consumer watchdog in Washington who closely follows financial industry regulations, said of the Roskam-Neal legislation. “It makes things worse than they are. This keeps the loopholes and lowers the standard.”
That is what Congre$$ does!
Dennis Kelleher, chief executive of Better Markets, a nonprofit advocacy group in Washington, was similarly critical: “The bill is just the latest industry attempt to delay and kill the very simple rule that requires investment advisers to put their clients’ interests first.”
Neal’s legislation puts him on the opposite side of the issue from Massachusetts Senator Elizabeth Warren, who supports the administration’s proposals. Warren recently conducted a survey of investment companies that sell annuities, a form of investment often associated with high fees. She found that top-selling brokers, in addition to commissions, are rewarded with “kickbacks” in the form of free trips to places like Aruba and California wine country.
Disclosures of these incentives, according to Warren’s report on her findings, “are buried deep within prospectuses in complex legalese, rather than being provided in an easily available and understandable fashion.”
Having represented his district in Congress for nearly 28 years, Neal, a former mayor of Springfield, is the longest-serving member of the Massachusetts House delegation. He has held a seat on the Ways and Means Committee since 1993, making him an expert in the US tax code and the arcane details of investment products such as 401(k) plans.
Looks like it is time for him to go.
He is an old-school practitioner of Washington politics, shunning harsh partisan combat in favor of quiet relationship-building.
Yeah, we got the me$$age.
Neal’s top 10 list of career campaign supporters is heavy with insurance and financial services companies. MassMutual tops his list of career sources of political money with FMR (the umbrella company of Fidelity Investments), the Boston-based mutual fund giant, second, according to the Center for Responsive Politics, a nonpartisan organization that tracks political contributions.
Neal said that campaign contributions had “no bearing” on legislation he files and that his contributors are reflective of the mix of businesses in his district. He added he wants to move past the stark positions that have divided Washington.
By joining the heated battle over broker rules, Neal has waded into one of the longest-running fights of the Obama era. The “best interest” standards have drawn howls from the industry.
Powerful industry associations are fully mobilized in Washington and Massachusetts. The advocacy of the Boston Asset Management Association, a collection of mutual fund powerhouses, is coordinated by James Segel, a registered lobbyist who was former representative Barney Frank’s chief counsel and helped write the Dodd-Frank reform legislation. Segel said the danger is insurance and mutual fund companies will stop offering free retirement advice to middle- and low-income investors because the rules would be so burdensome.
The irony is not lo$t there.
A crucial moment for investment advice occurs when someone rolls over a 401(k) from a former employer and opens an IRA. The industry argues that these conversations are crucial to getting people to save.
Good thing we have a bankrupt government that just gave $700 billion away in tax loot as a Christmas present as Obama tosses around money like confetti looking out for us all and our retirements (what are all these IOUs in the Social Security Trust Fund?).
Fidelity 401k customers, for instance, “are three times less likely to cash out of their plans if they have had a conversation with a representative,” Fidelity spokesman Steve Austin said. “We support the bipartisan Neal-Roskam legislation because it ensures that middle class savers and small businesses get the critical help they need and desire, and that it is in their best interests.”
Do you want to talk to a woman?
In a statement e-mailed to the Globe, MassMutual said the Department of Labor regulations are “overly broad and ambiguous and will result in fewer Americans saving for retirement.”
But Roper, at the Consumer Federation of America, does not believe America’s investment industry will abandon IRA clients. She contends the industry is using scare tactics to sway the political debate.
“There is no way they are walking away from the multitrillion-dollar rollover market,” she said. “It is the most significant source of funds in average investor accounts.”
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I gue$$ it's a good thing there is next to nothing in the 401k I have already written off. They keep sending me mail for some reason.
