Financial Industry News

House Passes Bill Requiring Annual Counseling for Student Loan Borrowers

  • “Students and parents enrolled in federal loan programs will receive yearly counseling tailored to their needs,” Paul Ryan, House Speaker

  • “…with a complex federal financial aid system that provides little guidance to students, it’s often out of reach or leads to high student debt” – Ryan

  • The legislation is designed to improve “the timing, frequency and content of financial counseling,” - Suzanne Bonamici, D-Ore

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SEC's Clayton Says Sales Contests Must Die

“Main Street investors have no tolerance for certain questionable sales practices such as high-pressure, product-based sales contests . . . I do not believe it is possible for an investment professional to say with credibility that the investment professional is not putting his or her own interests ahead of the interests of the customer." – Jay Clayton, SEC Chairman

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Retirement Planning: 3 Truths Younger Workers Need to Know

  1. Retirement isn’t often a choice

  2. Retirement isn’t a bargain

  3. The longer you wait to start saving for retirement, the worse financial shape you’ll be in

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5 Facts You Might Not Know About Social Security

  1. Social Security pays benefits to children.

  2. Social Security can pay benefits to parents

  3. Widows’ and widowers’ payments can continue if remarriage occurs after age 60

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Details Emerge on Troubles at Wells Fargo Wealth Unit

  • Two whistleblower letters cited sales goals that led employees to push products with more fees

  • Financial advisors encouraged investors to move funds into products in order to generate extra fees, more revenue and larger bonuses

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If You're Worried about Social Security, Do These 4 Things Instead

  • Social Security is facing an impending revenue shortage that will cause it to most likely deplete its trust funds by 2034 and will only manage to pay about 79% of its scheduled benefits unless Congress steps in and comes up with a fix

  • If you're an older worker who's concerned about Social Security, you may want to

    • Build a Stronger Nest Egg
    • Work Longer
    • Plan to Work Part-time as a Senior
    • Reduce Your Senior Living Costs
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House Panel Passes Social Security Online Tools Act

The bill requires the Social Security commissioner to make publicly available online tools allowing individuals that are eligible for disability benefits “to assess the impact of earnings on the individual’s eligibility for, and amount of, benefits received through federal and state benefit programs.”

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Trump Creates Task Force to Police Elder, Cyber Frauds

  • The Trump administration task force will build on the task force set up “in the wake of the financial crisis” under the Obama administration, “which is now a decade passed and [which] focused on specific financial crimes and frauds.” – Acting Associate Attorney General Jesse Panuccio

  • The task force “is a broader effort looking at other areas of consumer fraud and market integrity, such as elder fraud and the growing problem of cybercrime.” - Panuccio

  • Cyber threats “present some of the greatest risks confronting today’s financial markets,” with bad actors using “new technology to perpetrate old frauds, including securities offering frauds.” – SEC Chairman Jay Clayton

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SEC Fines Morgan Stanley $3.6M for Failing to Protect Client Funds

  • The SEC finds that they failed to have reasonably designed policies and procedures in place to prevent its advisory representatives from misusing or misappropriating funds from client accounts.

  • Approximately $7 million was misused or misappropriated out of 4 advisory clients’ accounts in approximately 110 unauthorized transactions occurring over a period of nearly a year.
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Wells Fargo Agrees to $5M SEC Settlement

  • The SEC found that Wells Fargo “generated large fees by improperly encouraging retail customers to actively trade the products.”

  • The SEC concluded that the bank’s representatives “did not reasonably investigate or understand the significant costs of the recommendations.”

  • “It is important that brokers do their homework before they recommend that their retail customers buy or sell complex structured products” – Daniel Michael, Chief of SEC Enforcement Division’s Complex Financial Instruments Unit

 

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