Friday, February 3, 2017

Black Friday: President Trump Betrays Americans, and Embraces Wall Street Instead


Today President Trump betrayed the American people, as he issued one of his executive orders essentially instructing the U.S. Department of Labor to delay the April 10, 2017 application of the requirement that financial and investment advisers act in the best interests of their clients when providing advice on 401(k) plans and IRAs.

Today President Trump betrayed the people who voted for him. He promised to reign in Wall Street, yet today he gave Wall Street a huge reward - the ability to continue their ways, with no requirement that brokers act in the best interests of their customers.

Today President Trump betrayed Americans, as they seek to save and invest their hard-earned funds for their retirement needs. Tens of millions of Americans are being financially raped, each and every year, by paying excessive fees and costs relating to their investments. Wall Street does such a good job at hiding their fees, many Americans don't think they are paying any fees, or they believe they are paying far less than what is actually imposed upon them.

Today President Trump betrayed the American economy and job formation. With Wall Street's huge diversion of funds from retirement accounts, less capital is accumulated. In turn, there is less fuel for U.S. economic growth and the creation of American jobs.

Today President Trump betrayed American corporations, both large and small. Instead of being provided advice on 401(k) plans by trusted fiduciaries, many American corporations will receive advice from high-priced product salespersons disguised as advisors. The result? Business owners will be on the hook when, inevitably, class-action claims are brought by retirement plan participants. Yet, hiding behind the "suitability" veil, the product salespeople will escape accountability.


He promised change. But President Trump is just another politician. His billionaire cabinet members, many of whom are drawn from Wall Street, no doubt played a large role in influencing President Trump.

He promised to hold Wall Street accountable. He promised to protect the American people. But President Trump has done neither.

President Trump made empty promises to his voters. And now we see the result - undue harm will come to his voters, and to many other Americans, by his actions. All so that Wall Street can financially rape the American people.


I am a Professor of Finance and Financial Planning. For over 15 years I have been an investment advisor. For over 30 years I have been an estate planning and tax attorney. I know harm when I see it.

And I have seen it, in the portfolios of hundreds, if not thousands, of new clients who have sought me out. As I lift the veil on the investments and insurance and annuity products recommended to these clients, nearly always I see total fees and costs of 2%, 3%, and even greater than 4% a year. And the academic evidence is compelling - the higher the investment costs, the lower the returns due to investors.

Due to the nature of compounding, often the high fees and costs mean that investors, during retirement, will have 20% less, or 50% less, in their retirement nest eggs.


It is just and right that EVERY financial and investment advisor should be required to act in the best interests of her or his clients.

It is just and right that investment products should compete - not on the basis of how much revenue is shared with product salespeople - but on the basis of their merits.

It is just and right that a greater proportion of the returns of the capital markets flow to individual Americans, not to Wall Street and the insurance companies.

I urge you to let it be known - to President Trump, to your Senators, and to your Congressional representatives - that this Executive Order should not stand.

Mr. President, you have revealed today what you truly are - a friend of Wall Street's millionaires and billionaires. A friend of insurance companies peddling highly expensive products. And you have revealed to your voters, and to all of the American people, that you do not advocate for them. You will not protect them. You are just another sly politician, full of empty promises.

So, Mr. President, know this. I will fight you. I will stand up to you. I will speak out against these actions, which will cause tens of billions of losses each year to the retirement accounts of my fellow American citizens. In one fell swoop, by favoring Wall Street over Main Street, U.S.A., you dismally failed to deliver on your own promises to the American people.

You will hear more from me. For I will advocate for my fellow Americans, and for the economic future of America itself. And many others will as well. We will not be silenced. And we will remember this Black Friday, and hold you accountable for the harm you have caused today to hundreds of millions of Americans, and to America itself.

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