The recent news that Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez will introduce legislation to cap credit card interest rates at 15%, should be a major wedge issue between the progressives (including Sen. Elizabeth Warren) and Joe Biden.
This is a stark difference in their views about favoring financial services sectors, such as credit cards, home loans, and payday lenders, compared to Biden’s history of advocating for financial services firms and against consumer protections.
According to the Huffington Post, “data tracked by CreditCards.com, 39 million Americans have carried credit card debt for at least the past two years and another 8 million can’t recall how long they’ve been in debt. Together, that’s 44 percent of all cardholders. At the same time, credit card interest rates are higher than they’ve ever been.”
On the other side, Joe Biden is a pro-corporate recipient of major donations. For instance, the Independent has reported that “in the 1990s he (Biden) voted against several measures aimed at the regulation of credit card companies, one of which (MBNA) just happened to be his largest single donor throughout the decade. Even as issues like corporate power and economic inequality have increasingly entered the mainstream for Democrats, Biden has insisted: “I don’t think 500 billionaires are the reason we’re in trouble. The folks at the top aren’t bad guys.”
MBNA Bank, a financial services company from Delaware, and now a subsidiary of Bank of America., is a great case study of how Biden protects his donor’s interests.
The article continues: “The Times also details just how helpful Biden has been to MBNA and the credit card industry. The senator was a key supporter of an industry-favorite bill — the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” — that actually made it harder for consumers to get protection under bankruptcy.
‘As the Times notes, Biden was one of the first Democratic supporters of the bill and voted for it four times until it finally passed in March 2005. A spokesman for Sen. Obama told the Times, “Senator Biden took on entrenched interests and succeeded in improving the bill for low-income workers, women and children.”
“Yet the Times actually looked at the legislative record and paints a different picture:
“[Biden] was one of five Democrats in March 2005 who voted against a proposal to require credit card companies to provide more effective warnings to consumers about the consequences of paying only the minimum amount due each month. Mr. Obama voted for it.
“Mr. Biden also went against Mr. Obama to help defeat amendments aimed at strengthening protections for people forced into bankruptcy who have large medical debts or are in the military; Mr. Biden argued that the amendments were unnecessary because the legislation already carved out exemptions for those debtors. And he was one of four Democrats who sided with Republicans to defeat an effort, supported by Mr. Obama, to shift responsibility in certain cases from debtors to the predatory lenders who helped push them into bankruptcy.”
All this makes the protection of the credit card companies and banks some of Biden’s favorite issues. Biden is a corporate Democrat and if the DNC pursues its death wish of losing the next election in order to protect the status quo and fill its contribution coffers, it will push to favor Biden in the primaries and derail the progressives, Bernie and Elizabeth Warren.
So, it is pretty transparent who Biden represents, and it certainly is not average Americans.
Political commentators and the financial media are breathless over the latest economic numbers showing the lowest jobless rate in 49 years, but there is a big problem: These are quarterly, short-term numbers, and they do not indicate the financial health of the average American.
If they did have a direct impact, Americans would not be worried about their ability to retire. Instead, it is the opposite.
As numerous studies have shown, many Americans face a dismal retirement. About 50% of older Americans do not have anything in their retirement accounts. A Government Accounting Office report issued in March 2019 that found 48% of Americans over age 55 and older did not save anything in their employee sponsored or IRA accounts. Numerous other similar studies have found the same results over the past decades.
So, when federal agencies report positive statistics about the economy– whether they are about the jobless rate, productivity gains or wage increases–they fail to show the sharp disconnect between data that propels the stock market and the majority of Americans who have nothing to gain from these raw economic numbers.
Federal and state economic data take on a life of their own. They are widely touted by the financial media and make their way into political campaign speeches because they provide short-term political adrenaline. For the vast majority of Americans, the data creates a sugar high that lasts a few days and soon fades away.
The real measure of the average American’s financial condition is not data about jobless rates, changes in GDP or housing starts, but how well are they prepared for retirement.
But these periodic economic data dumps are a distraction. The financial media reports the numbers, but does not put them into context for the average American, many of whom essentially work from paycheck to paycheck. About 59 million Americans do not have three months of cash saved to meet an emergency, despite the recent positive jobless numbers, according to CNBC.
The real measure of the average American’s financial condition is not data about jobless rates, changes in GDP or housing starts, but how well are they prepared for retirement. After all, a person’s financial ability to retire with a comparable, but slightly lower, post-working living standard, represents their net accumulation of wealth over an entire working career. After all, the ability to retire with a modicum of financial security is part of the American Dream.
But retirement readiness studies show a different situation. Numerous retirement readiness studies all indicate a bleak future for millions of Americans. And while pundits gloat over the recent, positive economic numbers, they have no effect at all on the long-term ability of many Americans to save for retirement. For instance, a retirement report from the John Hancock annual Financial Stress Survey, found that “slightly more than three-quarters of survey respondents cited lack of retirement savings as a leading factor affecting their stress. Nearly half report they worry about it ‘a great deal,’ and only 40% expect to retire ‘about when planned.’”
This is the real mirror of how Americans gauge their financial situation, not periodic economic data dumps that fuel the stock market for a few days.
Fed Reserve Policies Against Average Americans
Retirement financial readiness is a marathon that requires a few basic things: wage growth over time; consistent savings, propelled by the miracle of compound interest devoid of excessive fees and expenses; debt management.
The government has a key role in managing all of this, especially in Federal Reserve Board policies, tax actions and job creation. But the Fed has often made decisions that are not based on the needs of average workers. Whether these are political or monetary is an ongoing debate, but the record shows the slant is against promoting wage gains for average workers.
Take the case of how the Fed acted against average Americans during the 14-year long period when Alan
Greenspan and wife, Andrea Mitchell
Greenspan served as Fed chairman (from 1987 to 2006.) Greenspan’s policies were shaped by the belief that any structure or regulation that impedes corporate profits, is detrimental to the economy. Regulation and taxes on the rich in any form fall under this umbrella. He also opposed the minimum wage, and regulatory agencies, such as the Food and Drug Administration, which hinder corporate operations.
However, Greenspan, a follower of Ayn Rand, advocated that practices, such as price collusion, would be permissible since they favorably change market conditions to favor participating corporations. Similarly, monopolies would be tolerated if they competed since they could maximize efficiency and minimize costs and prices. This helps explain why anti-trust laws have not been strictly enforced since 1981.
Greenspan also chose to enact Fed policies that largely kept inflation under control over the other choice of creating conditions that would increase wages. “Greenspan himself observed publicly on a number of occasions that the anxiety of American workers over losing their jobs was a critical factor in keeping wages down during most of the 1990s,” according to Jeff Faux is president of the Economic Policy Institute.
Building Retirement Wealth is a Marathon
It takes decades, often generations, for the average American to create enough wealth so it can generate a living monthly income. The lost decade of wealth erased from the 2008 recession, combined with the intentional decision to hold down wages during the Greenspan tenure at the Fed, are two main reasons why many Americans don’t have enough money to retire today. Gloating over “Trump’s stock market miracle” is slanted politically and immaterial to the vast majority of Americans, yet the media reports blindly reports the data with looking at its obvious mistake.
The real measure of American prosperity lies in the boring topic of how to be financially secure in retirement. This is one reason why retirement is rarely discussed in the media. It is depressing, boring and when done correctly, will show the flaws in the current unregulated capitalist system. All this would be bad for ratings, but it would be a great public service to a shaky democracy.
The Democrats are fielding 20 presidential candidates, each with positions on critical issues ranging from job creation to deal with the environment.
But underlying all the positions is a central issue to any democracy: How much corruption can the nation handle?
Americans are suffering through the most corrupt presidential administration in history. We have never seen nepotism, cover-ups, venality, using a public office for private gain and avoiding the law so blatantly displayed and televised on a daily basis.
Political corruption is defined as “the dishonest use of a position of elected power to gain a monetary advantage.”*
Americans who expected outward displays of intelligent, ethical and professional behavior from elected officials cannot comprehend how Trump’s barbarians entered the White House.
In the process, blatant corruption is now on full display in a seriously broken and failing system.
This problem is so bad, Transparency International created a Corruption Barometer, which found in 2017 that 44% of Americans think corruption in the White House is more pervasive now than 36% in 2016. Also, 70% of Americans think the government is doing less to fight corruption in 2017, an increase of 20% from 2016. And not surprisingly, 33% of Blacks think the police are highly corrupt. Other results from the Corruption Barometer paint a bleaker picture.
Corruption Is The New Normal
So as Americans evaluate which candidate to support in 2020, they should consider how much corruption the nation can tolerate?
Will it be skewed towards candidates that take big corporate contribution in exchange for future favors?
For example, Republican Senate Leader Mitch McConnell has increased his net worth to $24 million in six years on a salary of $193,400 a year. How did he do it?
On the Democrat side, Joe Biden is taking corporate contributions and has already lined up Larry Summers, JP Morgan’s Peter Scher, KeyBank’s Don Graves, and an ex-Goldman Sachs investor Eric Mindich, as his fundraisers, according to economist Matt Stoller. That’s the norm and voters can easily see how much candidates receive in big donations from sites, such as www.opensecrets.com.
In 1787 Scottish historian Alexander Tyler wrote, “The average age of the world’s greatest civilizations has been two hundred years. These nations have progressed through this sequence: From bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance; from abundance to complacency; from complacency to apathy; from apathy to dependence; from dependence back again into bondage.”**
Tyler’s description of the ascent and descent of societies resembles what we are seeing today. Americans can control this rate of descent into corruption by choosing the least corrupt politicians, but there is no guarantee this collective wisdom can reverse the trend.
To track this rising level of corruption, Mother Jones magazine has started a corruption project that will track instances and causes of political corruption. This is a major effort and there will not be a shortage of stories in the most advanced democracy in the history of the world.
*Mark Grossman, Political Corruption in America: An Encyclopedia of Scandals, Power, and Greed; Grey House Publishing, 2017.
Don't Be A Sucker: For some, these are the words of an imploration to those that are otherwise gullible. Do not be fooled. Made in 1943, this film, produced by the U.S. Department of War, addresses the very real and damaging effects of racial, religious, and fraternal oppression, as well as the roots of the nationalism and fascism that saw Nazism born.Let me be clear on something: Blacks, Muslims, Jews, Catholics, Freemasons, and refugees/immigrants are not our enemy, nor are they a threat to society whatsoever. As human beings, these men and women all have wonderful things to contribute to our society, and anyone seeking to oppose them have hate and ignorance in their hearts. We each have a duty to fight.We must stand against all forms of oppression—racism, sexism, classism, xenophobia, nationalism, and all others. We cannot allow history to repeat itself. We cannot allow the enemy to stand victorious at the expense of the lives, rights, and freedoms of society, from the greatest to the least. There are ways we can rise up as one.#RegisterToVote at rickyjmarc.com/vote, and you will be able to make your voice heard, hold elected officials responsible, and assure that the the voting rights of you and your neighbor are respected. Fight fake news, learn where you stand, and engage others in this process. Watching this short film is not enough—we have work to do. Organizations like the Democratic Socialists of America, Women's March, Black Lives Matter, ACLU, Southern Poverty Law Center, and so many more are on the front lines of these fights, and joining them through their local chapters will allow us to prevent the United States from becoming—for lack of a better term—suckers. Join our movement.
“For some, these are the words of an imploration to those that are otherwise gullible. Do not be fooled. Made in 1943, this film, produced by the U.S. Department of War, addresses the very real and damaging effects of racial, religious, and fraternal oppression, as well as the roots of the nationalism and fascism that saw Nazism born.
“Let me be clear on something: Blacks, Muslims, Jews, Catholics, Freemasons, and refugees/immigrants are not our enemy, nor are they a threat to society whatsoever. As human beings, these men and women all have wonderful things to contribute to our society, and anyone seeking to oppose them have hate and ignorance in their hearts. We each have a duty to fight.
“We must stand against all forms of oppression—racism, sexism, classism, xenophobia, nationalism, and all others. We cannot allow history to repeat itself. We cannot allow the enemy to stand victorious at the expense of the lives, rights, and freedoms of society, from the greatest to the least. There are ways we can rise up as one.
“#RegisterToVote at rickyjmarc.com/vote, and you will be able to make your voice heard, hold elected officials responsible, and assure that the the voting rights of you and your neighbor are respected. Fight fake news, learn where you stand, and engage others in this process. Watching this short film is not enough—we have work to do.
“Organizations like the Democratic Socialists of America, Women’s March, Black Lives Matter, ACLU, Southern Poverty Law Center, and so many more are on the front lines of these fights, and joining them through their local chapters will allow us to prevent the United States from becoming—for lack of a better term—suckers. Join our movement.”
When something very newsworthy happens, people are re-awakened. That happened when Trump was elected. It has been downhill ever since.
Since Trump’s election, Americans have been exposed to a lifestyle of the sociopathic, unrepentant and venal.
This has happened as the average American continues to pay their bills, fails to harass women or the less fortunate, and basically has a great sense of the boundaries that separate justice from injustice.
The average American cannot articulate it, but almost all of the American culture embodies it. Frank Capra and Disney put it on the screen, Bob Dylan and Bruce Springsteen sing about it, and comic book heroes defied gravity and bullets to make justice happen.
So, when the long-awaited Mueller Report was released in April 2019, Americans expected justice for a life-long sociopath who doesn’t pay his bills, lies with impunity, fakes loan applications, dates porn stars while married, and sues anyone who gets in his way. The report was a slap in the face to Americans.
Millions of dollars later and two years in the making, the report largely concluded what most Americans already knew. Trump and his family were crooks. Worse, he was getting away with it again, this time enabled largely by white men in expensive suits, many of whom are federal employees who have never been unemployed a day in their lives.
There is no posse after Trump. Instead, the people in charge are talking and waiting. There is no sense of immediacy because unlike average Americans who pay bills monthly, politicians are on federal time, which changes with the seasons.
Holder: Self-interest above justice
The corporate Democrats in opposition to Trump are waiting for more polls. They weigh decisions based on their own reality. They have no sense of justice. And like former President Obama and his Attorney General Eric Holder who failed to put any of the bankers who caused the 2008 recession in jail, inaction is the default mode for both parties today. Rich people get away with things that average people cannot.
Dispensing justice requires action. Average Americans don’t have the luxury of evading bills and responsibilities at work like politicians in Washington and state capitals nationwide. But Americans have been waiting decades for judicial and economic justice. Now, we see the system is fundamentally broken and corrupt.
TV shills with high school educations dictate national policies, while elected officials head for the sidelines whenever a decision needs to be made. The country’s leaders are in a national timeout. There are no referees to start the game.
When I worked at the New York Stock Exchange, a longtime employee told me his secret to success. He said, “The inbox is for things that time will settle, the outbox is for things that time has already settled.” He stayed there for 30 years and collected a huge pension, so it worked for him. Too bad that is not the formula for average Americans.
The Democrats have headed for the sidelines. They don’t understand that the court of public opinion is in session and demands accountability. Corporate Democrats taking corporate donations know the popular tide is changing, but they are taking the cash. After all, it is a sure thing, not like picking whatever is behind Door #1.
So for Americans who have a sense of justice, we’ll have to keep on waiting until 2020, or maybe never. We will never see justice from the Democrats in Congress or from the highly-touted, well-paid lawyers working in the Southern District of New York in Manhattan who have enabled and abetted Trump his entire career.
The concert was a success, but the audience had died.
Trying to recapture any piece of your past is a futile activity.
We can certainly learn from our pasts, but it cannot be recreated. If you try to recapture any part of your memories, you will be disappointed.
That was a lesson learned from attending a recent rock concert in West Palm Beach, Florida. The onstage group was the Cream, or more correctly the sons and a nephew of the original group that was known for its long, energetic, power solo improvisations. The original three-member group only lasted from 1966 to 1968 before life intervened and they dissolved the band. During this short time, the group’s third album, Wheels of Fire (1968), became the world’s first platinum-selling double album.
Now, almost 50 years later, two sons of the original players (Kofi Baker, Ginger Baker’s son), Malcolm Bruce, Jack Bruce’s son) and Will Johns (Eric Clapton’s nephew), created the ultimate, near-genetically exact tribute band. By taking lessons from their fathers, along with some developed musical talent, this band gives a very close re-creation of the original sound from 50 years ago.
The musical nostalgia worked, but the big disappointment was from my fellow Baby Boomer concert attendees. As much as I looked forward to this event, I was even more excited to see who would attend this event. I expected the crowd to show the expected signs of aging, but more importantly, the verve and raw energy that I saw in the audience during a Cream concert in Chicago in 1968 was all gone.
Too many Baby Boomers at this event, held in a grand carpeted concert hall, suffered from social media distractions and the isolation of retirement. The crowd was almost 100% white, and judging from the cars in the lot, were middle- to upper-class retirees from the surrounding towns. But a big piece of this gathering of like-minded fans was missing.
Walking Through Life
What was different from the rock concert experience of 40 years ago was the feeling that we were attending something new. Maybe it was the fresh sense of being close to your 20s. But there was much more. The era of the 1960s is hard to describe. Things were changing fast.
The Viet Nam War had energized the nation, a corrupt president was forced out by a Congress that largely had a sense of duty, drugs gave many people new experiences, students on campuses organized around a purpose or shared goal. There was a sense among some young people that real progress could be made towards a future social goal. Things could be better without the great advances we have today in consumer technology. There were no social media.
If you wanted a date, you went to a party, bar, restaurant or the campus. You had more control. If you didn’t act, you could blame yourself. Accountability worked. There was no such thing as “incel” groups. These guys were just nerds, without any special self-pitying identity they have today. At a rock concert in the 60s or 70s, concertgoers passed joints down the row to anonymous strangers until it disappeared 10 or 20 people down the row. Many people went with friends to the concert and made more friends at the concert.
Flash forward 40 years, and this concert audience lacked any social awareness. They were socially stoic. I saw couples come in, sit down and not talk to anyone. Many pulled out their phones at intermission rather than talk to people around them. I wondered how many of these Baby Boomers had seen the original group in concert? Where were they when they heard the band? Were they in college? How much did they pay for a ticket? (My bet is that it was under $10 in 1970 compared to $80 today.) Why were they at the concert tonight? What made them want to hear a tribute band? In short, what were they looking for? Or, was it just another night away from the condo or the house in West Palm Beach, Florida?
I never found out. We went to the concert, heard it and left without talking to any of our fellow Baby Boomers and concert attendees. The band was energetic and talented, but not original. They told some stories about the ill effects of too many drugs. One said he was given a joint to smoke by his father at age six. Some had a few stories about how songs were written, but the Cream was never known as songwriters; they were great soloists at a time when they could shine and cement their reputations. That is what brought the crowds 40 years later, but while it was the same music, it was not the same crowd.
A Greek philosopher said: “you cannot cross the same river twice,” and he was right. This river had flowed past decades ago. The people in the beautiful concert hall once were in the river; now they were well downstream. And all that happened without selfies to record the change.
This is a copy of a document, believed to be original, found in a parking lot outside of a Sonics in suburban Alexandria, Virginia, near the special Naval Intelligence Agency. The document was written on the letterhead of the U.S. Special Counsel and was wrapped around a handful of used napkins. A careful analysis of the paper by the Washington Post confirmed it was the same paper used by the Justice Department as per a special requisition for heavyweight bond 40# smudge-proof laser paper only available from Staples. Here is a copy of that page that is being seen here for the first time by the public.
…. as seen in Kiev. It was further found, among the many other crimes committed by xxxxx xxx xxxx II, and xxxxxxxx Jr., and xxxxxxx Gambino, a cousin of xxxxxxx Trump, and xxxxxxx Corleone, all of Manhattan and Bayonne, New Jersey. These individuals, acting in unison and in a premeditated act, then met on the 33rd Floor of Trump Tower to discuss xxxxx, xxxxx voting machines, xxxxxx, a new farfel recipe, xxxxxx types of white fish, xxxxxx at 350 degrees for six hours. The group then exited this office and went to the 22rd floor where they met with Ukrainian xxxxxx xxxxx, a fan of the Three Stooges, xxxx xxxx of Finland, xxxxxx of Lapland and xxxx xxxx Samoa. They then discussed the upcoming U.S. election and how it could be tilted using xxxxxxx sex with monkeys, and xxxxx old outtakes from Green Acres with Za Za Gabor. The group also agreed that William P. Barr XXXX would meet with XXXXX for a bagful of cash and tamales.
The investigation also found that xxxxx Trump, xxxxxx Trump, xxxx Trump Jr. and xxxxxx Trump did conspire, receive altered documents and requested money for protection from XXXX, xxxx, xxxxxx and all individuals listed in the first 175 pages of the Manhattan White Pages, as well as patrons of the XXXXX, New Jersey Pet Smart.
At the conclusion of stage 112 of the this Special Counsel’s 890 section investigation, we find that Individual 1, in co-ordination with xxxxx Stone, the Rockettes and Milli Vanilli violated Sections 1 -311 of the U.S Penal Code, the Culinary Institute of America, and the Portable Sanitation Association International.
At this point, this page from the Muller Report is stained and water-logged beyond recognition. Yet even this fragment shows the extent of the crimes committed and the lengths that the entire XXXXXX and the Republican Party will go to to avoid any connection with xxxxxxxxx.
This is what redaction looks like (almost, if I can figure out how to make black blocks in Word, but you get the idea.) Redaction, as used in the Muller Report, is used by people who have much to hide from the American people. It is used by countries that do not believe in democracy.
manage their finances, including a minimum wage teller who works for his bank. In this interesting video exchange, Dimon is dumbfounded when asked how to manage money on minimum wage.
As a CEO, Dimon probably is not confronted by real-world financial issues like the one in this video. As a Harvard Business study found, when it comes to people who enjoy a luxury lifestyle, like Dimon, they are not always concerned about others.
The study said “One commonly proffered explanation is that these executives lack a moral compass, leading them to care only about themselves to the extent of hurting others. Our findings offer another perspective—the fact that these executives are surrounded by luxury did not help their decision-making to be more “other-oriented.” Yet their seemingly “immoral” decisions stem not so much from a real desire to hurt others but more from over self-indulgence. Perhaps besides limiting the size of bonuses, limiting corporate excesses and luxuries might be a step toward getting executives to behave more responsibly.”
So, it seems pretty simple: If you take away the actual entitlements from people, they will come down to earth.
The huge bonuses, bodyguards, unlimited expense accounts, executive assistants, have control over huge discretionary benefits, golden parachutes, and being able to manipulate the executive compensation committee, all contribute to the sense of entitlement, don’t add to the pursuit of equality. Jamie Dimon is no average guy, so as this exchange shows, he does not like being put on the spot or being asked about how average people make due on a minimum wage.
A new survey from the Insured Retirement Institute (IRI) found that 55% of Baby Boomers had retirement savings today. In 2011, the study found that 75% of Boomers had retirement savings. Worse, among this current group, 50% have less than $250,000 in retirement accounts.
Depressing surveys about the how ill-prepared Americans are for retirement are the norm. I have been writing about retirement issues since the late-1970s and cannot recall one positive report or survey among the thousands conducted that ever said Americans approaching retirement had the needed money or were financially secure to actually stop working and maintain their pre-retirement standards of living once regular work paychecks stopped. It has never happened.
But the most depressing thing about this IRI report is that it found financial professionals who work with pre-retirement clients on a daily basis were not including the costs of medicine, hospitalization, drugs and physical rehabilitation in their financial estimates about the expenses of life in the post-working world.
According to the report (as reported in an April 8, 2019 issue of Plan Sponsor), “70% of those who work with a financial adviser have calculated a retirement savings goal. However, many of these advisers are failing to include health care and long-term care costs in these equations, as only 50% of those working with a financial adviser have included health care costs in their retirement savings goal, and only 36% have included long-term care in that equation.”
This is astounding.
It is gross professional malpractice for the 50% of advisors who forget to include health care costs of all types in retirement financial planning. It is also the main reason why the vast majority of Americans will never be financially secure after they stop working.
Financial Advisor Malpractice
Health care costs are rising and getting worse. These costs also cause health care-related bankruptcies. While a Washington Post report found that medical bankruptcies accounted for just 4% of all bankruptcies, it found that lost income from being ill added to personal household debt and a lower living standard. People who are hospitalized worked less when released, so their lost income, combined with a high debt load that most Americans have in a consumer society, was a larger cause of financial stress than the actual medical bills.
This means financial planners who omit medical and health care costs, including long-term insurance premiums, in their financial projections are guilty of gross professional malpractice.
So if you go to a financial advisor who does not ask about health care costs, student debt loads, the last time you got a raise, or if you are supporting other members of your family on your salary, do yourself a favor and fire that financial advisor.
Instead, find a registered investment advisor (RIA), or financial planner who follows the fiduciary standard, and knows the full dismal political and financial picture Americans face in the Trump era.
Only a financial professional who knows today’s political realities can deliver sound advice. If they are wimpy or evasive when discussing health-care-for-all, taxing the wealthiest Americans for their fair share, closing tax loopholes, addressing the huge wealth disparity in America or student loan debt, find a new advisor immediately.
Because the new political reality playing out on every computer and TV screen in the nation shows that unregulated capitalism is a failure for the average American.
Ask Your Financial Advisor About Neoliberalism
The policies of neoliberalism, the political ideology that the “free market” (that does not exist) will solve all social, economic and political problems, are a failure. This is the policy that has governed the U.S. since the Reagan administration and has been discussed on this site many times. It is the root political-economic policy problem responsible for many of the problems in the U.S today.
If your financial professional does not know what neoliberalism is, have him contact his PR or the legal department that controls the lobbying money. Wait in the room when he calls and listen to the conversation. If he cannot provide you with an answer while you are in the meeting, you are sitting with someone who does not know what is happening at this or her own firm.
Avoid the huge financial planning firms that make political and lobbying contributions to groups that create regulations and laws that are against investors. Definitely avoid large global and national banks and insurance companies that offer mutual funds and financial planning services, such as Well Fargo, Bank of America, JP Morgan Chase, Citigroup, Merrill Lynch, Morgan Stanley, Principal Financial and John Hancock that have huge trading operations that work against the interests of average investors.
Your best alternative is to go to a co-op or credit union that is owned by its customers and depositors. These have a very different ownership structure that is focused, client- or community-centric. It may surprise you, but the big global banks use your money to trade against you or to make policies that work against you. Just look at their lobbying contributions on www.opensecrets.org and see how your money is being used against you, the customer.
Given the proliferation of media today, no adult citizen should be uninformed about what is happening in Washington and at the state level to make it harder for average Americans to retire, be financial secure and not suffer a decline in their standard of living after they stop working.
In short, get informed or get poor. For too many Americans, the odds are already against them.
Advisors have to become more transparent and offer a more inclusive financial and life plan, while investors say they are willing to pay for advice, as long as it is transparent and shows value.
Those are some of the results in an April 2019 report in The Cerulli Edge—U.S. Asset and Wealth Management Edition. The report also found the following:
• The highest value that retail investors asked of their advisors was transparency (73%), understanding of needs and goals (67%), and promptness of requested follow-ups (66%.)
• Investors are more aware of fees and what they are receiving. Only 42% in 2018 of respondents said they were unaware of the fees being charged compared to 65% in 2011.
• Advisors also said clients were more sensitive about fees. About 75% of advisors agree or strongly agree that prospective clients care more about fees compared to five years ago.
• As of 2Q 2018, 53% of investors said they are willing to pay for advice regarding their financial investments. This is up 15% increase from 2009, when only 38% of investors said they were willing to pay more for advice.
• Cerulli also found that advisors have to become more holistic in their business approach: “To remain competitive, advisors must evolve their definition of advice to include nonfinancial aspects of the client’s life and curate a meaningful experiential process for their clients.”
Wake Up Call For Advisors
The report also said that only 30% of advisors deliver services that make their clients “feel special,” according to Cerulli research analyst Marina Shtyrkov.
“Experience-centric practices exhibit stronger results than their peers across a series of metrics, including a higher median client size, lower asset attrition, a broader service set, and greater likelihood to target affluent clients,” Shtyrkov said. “By outpacing their peers in these categories, experience-centric practices demonstrate that advisors can harness the power of their client experience to increase retention, reduce attrition, and generate a strong referral system.”
One key finding here concerns the holistic approach. As noted in this article, “Time To Think Outside the Box in the Next Generation of Financial Wellness Programs,” on this site, employee benefits departments are also adopting a more financial wellness” or holistic approach to advising their employees about health-related, social and financial matters in more inclusive programs that address consumer and student debt burdens, mortgage applications, credit repair, improving the work-life balance, health matters, as well as instruction on basic financial literacy.
This holistic approach can certainly be adopted by RIAs who have already adopted the fiduciary approach that includes fee transparency, and fee and expense product sensitivity.
The Cerulli report also addresses what it called the “Mega Effect” of building larger client-focused and digitally savvy teams. These teams are the core group that “advisors must evolve [to expand] their definition of advice to include nonfinancial aspects of the client’s life and curate a meaningful experience for their clients.” These services in a high-net worth client setting include practices that go “above and beyond to make clients feel special, and that the practice has a repeatable, consistent client experience.”
The report quoted one broker-dealer executive as saying that “the key thing” his firm promotes is “the delivery of advice versus the delivery of solutions.” His firm focuses on how advisors are “helping clients uncover solutions holistically.” He believes that one of the most significant trends affecting the industry is the “shifting dynamic of being paid for advice and the commoditization of the investment solution.”
Implementing Holistic Approaches
The Cerulli report provided some examples of this holistic approach from advisors to their clients. These included birthday parties for elderly clients, bereavement phone calls, sending books to clients who invested in 529 plans, and family summit meeting for family office clients.
However, advisors may be able to learn more from some employee benefits departments that offer “financial wellness programs.” While these corporate and municipal programs work with a different client demographic, income and net worth base, they address sources of serious financial stress that emanate from inside and outside the work environment that affect all investors.
For example, one of the most inclusive employee wellness programs is offered by Palm Beach (Florida) County in its “Clerks for Wellness” program. According to Darlene Malaney, COO of finance for Palm Beach County, the move from “financial wellness to employee wellbeing” will create a “holistic employee wellbeing initiative” that bridges the gap between financial stress and its impact on physical and emotional health. To do this, the county is working with parties in health care, banking, and retirement plan experts. All this is being done, Malaney said, because the county needs to take actions that serve a “public purpose.”
RIAs can adopt some of the corporate wellness program offerings to promote their services that address sources of financial and social stress outside of the workplace. But to be truly inclusive, realistic and complete, these holistic wellness programs have to address political issues, such as the stability of Social Security, Medicare, wage growth, job security and student loan debt.
While this may be outside the comfort zone of many advisors, the new reality is that these built-in financial safety nets are in danger of being curtailed without any new supports in place. Without these supports, Americans of all income levels will feel their ill-effects and financial stress directly or in their families. This gives the term “holistic” a very new and actionable meaning.