SURVEILLANCE STATE: GOOGLE, AMAZON, FACEBOOK AS PAID AGENTS OF THE GOVERNMENT?
WHICH TRUMP IS GOVERNING?

THAT FREE STEAK AND LOBSTER DINNER CAN COST YOU THOUSANDS OF DOLLARS

DINNER

I continue to receive a number of offers for a free dinner at a premier restaurant if I am willing to listen to an investment pitch for annuities. Pretty much the same scammy methods used by the timeshare industry that held out portable televisions and other goodies in you were willing to sit still for a “presentation” that almost always ended in a “hard sell” pitch that would make car salesmen envious.

Annuities, a bad word unless you sell them or manage to beat the odds and live longer than your “actuarial lifespan.”

Annuities are an insurance product that is usually sold to retirees who are afraid that their lives will outlive their assets. Basically, you pay an insurance company a lump sum for a guaranteed payout in the future. The purchaser of an annuity only benefits if they live longer than projected by the actuaries, and lose if they die early. Salespeople are heavily compensated up-front, and annuity purchasers face heavy penalties if they attempt an early withdrawal.

The single question that can shut down any scammy pitch that provides up-front disproportionate rewards to the salesperson…

ARE YOU ACTING AS MY FIDUCIARY?

A sales representative with fiduciary duties is legally and ethically required to put your best interests before their own, even if their actions put them at a disadvantage. For a financial advisor with fiduciary responsibilities, this may mean telling you that the offered product has serious flaws and that you may be better served by purchasing another product that earns the sales representative little or no commission. Do not be fooled by a sales representative that explains that they are on salary and do not work on commissions – unless they are a fiduciary; you can be they are rewarded for their performance, possibly with monthly bonuses that called something other than commission.

Politics and money trump consumerism…

Once again the financial industry’s lobbyists have been hard at work to kill the Department of Labor’s so-called “Fiduciary Rule.”

The Department of Labor’s Fiduciary Rule significantly expanded the circumstances under which a salesperson is considered to be a “fiduciary” under the Employee Retirement Income Security Act or the Internal Revenue Code. The Fiduciary Rule was finalized in April 2016 and was originally scheduled to be phased in from April 10, 2017, to Jan. 1, 2018. As of June 21, 2018, the U.S. 5th Circuit Court of Appeals officially vacated the rule, effectively killing it. In a case brought by the U.S. Chamber of Commerce, the Financial Services Institute, and others, the Court ruled 2-1 that the rule was unreasonable and that the Department of Labor acted in an "an arbitrary and capricious exercise of administrative power." It will be up to the Department of Labor to appeal the ruling to the United States Supreme Court.

Bottom line…

Perhaps the best advice that can be given is from the Better Business Bureau who urges individuals to “investigate before you invest.” It takes a strong personality to tell a hard-charging salesperson that you want something in writing and will think it over. Presenting the deal to other “advisors” and letting them shoot it full of holes while they tout their products and self-interests.

Remember: ask if they are acting as a fiduciary and if they say yes, get it in writing on the company’s letterhead, signed by a corporate office (not the sales manager).

It’s your money, do not be ashamed to protect it from the financial vultures and sharks. Or as Mark Twain reminds us, "It is easier to stay out than get out."

-- steve


“Nullius in verba.”-- take nobody's word for it!

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell


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