Street Wishes for Windfall

Allowing workers to divert some of their Social Security contributions to private accounts could prove a huge bonanza for financial services firms. But it would be a government-style bonanza -- in other words, one with a long lead time.

"They all win to a certain extent if Social Security is privatized," says Kenneth Worthington, CFA, an analyst with CIBC World Markets in New York and author of the Nov. 1 report, "Bush's Plan for Social Security Reform Could Be Electric for Financials." Fees to Wall Street firms will likely be in the billions. (Worthington's firm does business with and seeks to do business with companies covered in the report.)

In Worthington's estimate, letting workers redirect 4% of their 12.4% annual Social Security contributions to private accounts would generate a hefty $75 billion a year. That compares with the average annual $200 billion contributed to the mutual fund industry in the past seven years. ...