Some Old People's Household Habits
INTERESTING STUFF – 11 February 2017

Trumpian Attack on Old People

Did you know that even after the 2008 financial crisis, it has been legal for financial advisers to steer clients toward investments that produce the biggest commissions for them and not ones that are in the client's best interest?

That's right. Fraud has been legal all this time. It's bad enough for people of any age – few of us understand the complexities of Wall Street investing – but it is particularly hard on retired people.

So, last year, President Barack Obama's administration passed new regulations raising ethical standards that govern the industry. The one in question today is called the fiduciary rule and it

“...requires brokers to act in a client’s best interest,” reports The New York Times, rather than seek the highest profits for themselves, when providing retirement advice.”

Fiduciaryrule

The fiduciary rule was set to go into effect on 10 April 2017. But then, last Friday, President Donald Trump signed a memorandum asking the Labor Department to review the rule which critics say, according to the Washington Post, could limit options for investors and raise costs for financial firms. The White House addressed that issue, as quoted in the Post:

“'The rule’s intent may be to have provided retirees and others with better financial advice, but in reality its effect has been to limit the financial services that are available to them,' White House press secretary Sean Spicer said Friday.

“'This is exactly the kind of government regulatory overreach the president was put in office to stop,” [Spicer continued.]

Yeah, right. With several Goldman Sachs appointees in the Trump administration, when it becomes a choice between safeguarding elders from predatory advisers and enriching Wall Street, it is easy to figure out which way it will go.

As John Cassidy noted in The New Yorker,

”...five financial stocks account for more than forty per cent of the rise in the Dow Jones Industrial Average since November 8th. The jump in Goldman’s stock alone accounts for a quarter of the over-all rise.

“On Friday morning, bank stocks rose again. At noon [after Trump signed the fiduciary rule memorandum], Goldman was up four per cent.”

As bad as this may become for retirees, there is much more to be frightened of coming from the Trump administration in regard to financial (de)regulation and I strongly suggest you go read Cassidy's New Yorker piece about that.

It is exhausting trying to keep up with all the ways, every day, the Republican Congress and the president are working to turn our republic into something unrecognizable.

Many serious television commentators and pundits along with their counterparts in print have warned about not succumbing to Trump fatigue, that we can't count on Congress, certainly not the Democrats and maybe not even the courts to keep American democracy safe.

It is up to us, the people, to keep the Constitution and the country intact.

Now, go call your representatives' offices (you have those numbers saved by now, don't you) and let them know where you stand on whatever the Trump firehose has sprayed our way this morning.

* * *

RESISTANCE NOTES:
Okay, maybe not exactly a resistance note but close enough.

Tuesday night John Oliver, who is host of the HBO show, Last Week Tonight, appeared on The Late Show with Stephen Colbert to promote the return of his program which begins a new season on Sunday.

During the interview, Oliver tells Colbert that although he is a green card holder and his wife and son are American citizens, he worries a little bit about being deported depending on the whims (my word, not Oliver's) of our new president. "A green card may not be enough," he says and although deportation is unlikely in his case, there is now, with the election of Trump, "a non-zero chance of it happening."

He and Colbert also mention his cover story interview in the latest issue of Rolling Stone magazine that you can read here.

It's wonderful to have John Oliver in back in such fine form.

Comments

I can think of no reason to end the fiduciary rule other than to go back to making it easy for "financial advisers" to take advantage of people who hire them thinking those advisors are putting the clients' financial interests above their own. In 2010, my husband and I discovered how easy it is for people to take advantage, especially of the elderly and disabled, when we had to suddenly take over his parents' care a few years ago when they were 90.

They had, just a few years earlier, began to dabbled a little bit in the stock market. via one of the more ubiquitous franchises that can be found in a number of storefronts in almost every city in this country. When we suddenly had to take over their affairs, we discovered that they had put most of their money in BP, which had, just a few months before my in-laws' own life crisis, had its offshore disaster. That stock (and it wasn't very much, but it was a lot for them, especially at their age) had declined significantly and when we called the person who handled their account and asked that it be sold, hos response of the guy who had handled their investment funds for the few years they had been in the market, and whom they trusted implicitly and believed was watching out for their best interests, said "Well, it's going to go back up."

My in-laws were 90, had recently entered an assisted living facility, both with poor prognoses, and had, due to the BP stock decline and not having got out of it sooner, lost about a third of the funds they would otherwise have had by that point in their lives. Why their account representative had not alerted them immediately, or at least soon after it began its decline, is beyond me. At the very least, there should have been a conversation before the one we generated six months after the fact.

But why would this be of any concern to Trump? In "Why We Want You to be Rich: Two Men One Message," that he co-authored with Robert Kiyosaki (the author of "Rich Dad") in 2006. he responded to the question, "I am a baby boomer without much money. What should I do?" with this answer: "I'd worry. Things aren't looking really great for people at the age of 60 in this country unless they're well off enough to care for themselves for another 35 years, counting inflation and rising fuel and medical costs." What empathy.

I was surprised to learn that the expectations Obama was placing on investment businesses did not already exist, but I am not at all surprised to learn that Trump is undoing these, along with all the other damage he is wreaking.

Well, I mangled a lot of that prior post. Please overlook my numerous typos. Can you tell I haven't had any coffee or breakfast yet, and that this is a topic that really hits a nerve?

Also -- we are so looking forward to John Oliver's return. Samantha Bee's done a pretty good job of providing alternative programming for us in his absence, but we've really missed John and we're grateful to have them both again. We need all the honest and intelligent coverage and commentary on Trump that we can get.

It is an unenforceable rule and a boon to attorneys. Nobody knows what investments are in the best interest of clients because nobody knows with any degree of certainty if an index fund will always beat a mutual fund or if both will beat out an annuity. Nobody knows which insurance companies will survive and which will fail rendering their annuities worthless. Nobody can prove in court which alternative investments are the best or if they should even be considered. The market decides in the long run. Its as inane as letting people file lawsuits because a Chevy dealer sold them an Impala when a Honda Civic might have been a better choice. You really can't protect people from their own ignorance by encouraging lawsuits.

@Steve from Arkansas -- so Trump's reversal of this rule is a good thing? He certainly is not one to shy away from lawsuits himself.

Rule or no rule, "financial advisors" can, and should, provide ethical guidance based on analysis of information that they are likely more privy to, get sooner, and know more about, especially when "advising" people who have never used a computer, and did not get into the stock market until their late 80's. Sadly, in these scenarios, self interest rather than the best customer service, often rules, maybe now more than ever.

Oh, jeez, thanks for letting me know I'm not the only one with Trump fatigue. I've been feeling stressed, I have to make the phone calls, send the e-mails................but, at least for now, I am not going to join a group, or participate in a demonstration. And, while I listen and read about what T is doing, I will not listen to, or watch him. It's just too awful.

I have Trump fatique, bigly. But this didn't stop me from becoming enraged when I heard about how the fiduciary rule will be changed to suit the financial industry, not their clients. I have invested for years, but simply cannot maintain my knowledge and interest to the extent needed to guard against new regulations and changes that may harm me. I trust my advisor, but am aware that he is in the business of making money for his company, not necessarily to benefit me. So apart from cashing in entirely, and possibly losing income, I really have no options but to let the chips fall where they may. Thanks for your constant, up to date information, Ronnie!

I love John Oliver, and looking forward to his show again, he's got style.

It seems to me that if I hire an expert to help me invest or manage my "wealth" (as they say in the TV ads), there should be a fiduciary relationship from the start. That person should be expected and required to act in my best interests while earning a fair rate of compensation for him/herself. Yet, a law was needed to force some financial advisers to do the responsible thing. Now we don't have that law.

Like many elders, my husband and have neither the expertise nor inclination to keep up with financial markets and machinations. We pay our advisor an annual fee, which helps assure that the relationship remains fiduciary. His guidance helped us avert major losses during the recent recession and has kept our modest investments on an even keel during market ups and downs which is worth it to us.

If The Orange Apparition weren't the jackass that he is, he might have some consideration for the age demographic to which he belongs. However, he has been insulated all of his 70 years from the financial realities with which most ordinary people live. He and his fellow vulture capitalist cronies are now busily creating a system that puts them in a position to further enrich themselves by cheating others. They're good at it because that's how many of them got rich in the first place.

And his supporters think he's on THEIR side? HA!

For Cathy above. The broker was somewhat correct. He was seeing it through the eyes of the market and not someone in their 90's. 1) he should never have allowed them to invest in anything by an index fund at their age. 2) He was not a good broker and did not have an interest in his client and should be fired. Finding someone with empathy and investment knowledge is hard.

Not too far-fetched; almost out of Albert Brooks' "2030: The Real Story of What Happens to America." Figuring out ways to dispose of the "olds."

With the energy of yesterday' rant behind me, and having read all the other comments on this topic, I would just like to say one more thing. for anyone who may still be reading this thread.

I understand that, for the average investor, the market is for the long term, and I would hope that, to the best of their ability, those providing financial advice take all factors into account when providing that guidance to anyone. But I am acutely aware of how many people there are among us who are easily misdirected and led down garden paths, largely through no fault of their own.

I have worked most of my life in the social services field in a city that has suffered badly from the manufacturing decline, and which now has a very high incidence of residents with low incomes, physical and mental health issues (including a variety of addictions) and many problems related to these. Among the general population, the rate of susceptibility to poor advice and bad leadership is high enough, but among those with impaired abilities to process advice and direction it can be off the charts.

ya know for us seniors it is not just this issue [of having to understand the complexities of the financial world] but of other things where we need to make choices.

I'm thinking here of health plans. The idea that Medicare would devolve into something where we have to "Shop around' to find the insurer that best fits our needs would be overwhelming to a lot of senior people.

As Cathy mentions the rate of susceptibility to making bad decisions or getting poor advice probably rises exponentially as we age. Like picking the wrong advisor picking the wrong health plan can be as bad or worse.

Sorry to say this as I am sure there are exceptions but as we age we need more consistency in having good plans available so a "not optimum" selection is not a catastrophic decision.

I know this is a bit off topic but it is the same issue. As seniors we need to have a level of trust in our choices and advisors.

Actually the biggest issue of the financial advisor in the first post [regardless of whether he made more money or not] was the idea that a couple in their 90's should have any money invested in a single stock. At that age the biggest task is to have money in low risk investments which are usually never single stocks. Any advisor who would be doing this may not be unethical but sure is a poor advisor in my opinion. I would think that fiduciary responsibility would involve picking the correct financial plan and that would be rather easy to enforce and successfully sue the advisor if not done according to good practices.

hell, oliver's right to be worried, we olds will well remember nixon's 3-year attempt to have john lennon deported. it was only the growing awareness of nixon's own malfeasance that finally derailed that effort. there is a discouraging number of citizens absolutely willing to put the jackboots on, and stomp on our liberties. and now they feel empowered by the shenanigans in the white house. sad!

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