Tuesday, 24 February 2015

Clipping the hidden fees of the ticket clippers

Reuters reports that President Barack Obama is proposing new rules to protect Americans from being steered into costly retirement investments that produce high commissions for brokers but low returns for investors preparing for retirement.
The proposed rules, which the Department of Labor is expected to submit formally in the coming months, will inject political pressure into an already intense debate over brokers’ obligations.
They would have an impact on thousands of brokerages, from large players such as Fidelity, Wells Fargo , Charles Schwab  and Raymond James, to smaller, independent shops.
Brokers would be held to a higher “fiduciary standard,” requiring them to put their clients’ financial interests ahead of their own.
The White House said the proposals target fees and payments that on average lead to a full percentage point lower annual return on retirement savings at a cost to Americans of $17 billion a year.
In particular, Obama called for new rules preventing retirement brokers from steering clients’ savings into funds with higher fees and lower returns, or advising clients to roll their funds over into higher-cost plans.

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