What could be better for an investor of modest means than to wake up one morning with a bevy of new friends in high places on Wall Street and in Washington?
Ignore the impending disaster for the low-income, low-balance retirement investor at your peril. This is about "life and death issues," said Georgia congressman David Scott at last week's annual meeting of Wall Street's leading lobbying group, the Securities Industry and Financial Markets Association, or Sifma.
The DOL, as the embattled agency is known, is recklessly seeking to raise the standards required of stockbrokers who give advice about retirement savings, its critics say.
Yes, I meant to say "raise" the standards, not "lower" them. And if you don't understand why rules to improve stockbroker conduct would be a terrible thing for mom and pop investors, it just means you don't have an appreciation for the special way that powerful people think.
I refer to these finance professionals as "stockbrokers" or "salespeople," by the way, because they aren't held to the same regulatory standards expected of real investment advisers. But they give themselves titles like "financial advisers" anyway, and cross their fingers that you don't know the difference.
Earlier this year, a government study concluded that investors lose $17 billion a year as a result of the conflicted advice they're given about their retirement money.
Wall Street has nonetheless made progress pushing the argument that the DOL's more demanding expectations of salespeople will hurt low- and middle-income investors.
Critics of the rule argue with a straight face that securities firms won't be able to afford to do business with low-balance customers if they can't steer those people to high-fee products. So they'll just stop serving them, the threat goes.
Arthur Levitt, Jr., who was chairman of the Securities and Exchange Commission from 1993 to 2001, says the arguments that America's least wealthy investors stand to be cut off from Wall Street's wares are bogus.