Wednesday, May 1, 2013

Wall Street fees can eat up 2/3 of 401(k) and Wall Street fighting to hide fact

Wall Street on Parade provided another example of where Wall Street benefits from opacity and fights vigorously against transparency that would show this fact.

Specifically, Wall Street on Parade looked at the fact that fees can eat up to two-thirds of a 401(k) and Wall Street has organized to prevent disclosure of this fact.

Last week we reported on a PBS Frontline program showing that a 2 percent mutual fund management fee can gobble up two-thirds of your nest egg for retirement over a span of 50 years of saving. Now comes an equally ugly truth.  
Since at least 1998 the U.S. Department of Labor, which oversees the nation’s 401(k) plans, has known that fee gouging was eroding the ability of workers to adequately build wealth for retirement in 401(k) plans. 
It took more than a decade for the Federal agency to pass a regulation mandating that 401(k) recipients receive fee disclosure in an annual mailing. 
Leading the charge against full disclosure was a coalition of trade associations dominated by Wall Street. ....
Back in 2007, when the Department of Labor put out for public comment its proposed rules on making fuller and clearer disclosures on 401(k) fees, a swat team of Wall Street related trade associations organized together to beat back too much disclosure. 
Noteworthy among the members was the infamous U.S. Chamber of Commerce, the Financial Services Roundtable and the Securities Industry and Financial Markets Association (SIFMA).

No comments: