Did you know there’s a Black Chamber of Commerce? There is, and they’re not too happy with President Obama these days. That’s because the Black Chamber of Commerce represents a lot of small businesses, and that includes a lot of professional financial advisors. Those in this industry are about to take a serious hit if new regulations Obama wants are put into effect, and that’s left the Black Chamber of Commerce wondering if Obama thinks, er, #BlackJobsMatter.
The Daily Caller explained why these new regulations might mean that if you like your advisor, you can’t keep your advisor:
“The rule will say that if you’re an adviser with a 401(k) helping participants, and you want to look at a lifetime income option [for your client] then you as an adviser would be effectively blocked from working with that participant if there’s any fee difference,” Brian Graff, executive director of the National Association of Plan Advisors, told TheDC, citing insider talk and a past Obama administration attempt in 2010 to push through similar rules.
If the fee you pay your financial adviser in retirement — for products like annuities — is even slightly higher than the fee you were paying your adviser when you were working and just had a 401(k) plan, then you will have to pay a 15 percent tax penalty on your total account value, Graff said, citing insider talk.
So if your 401(k) is worth $100,000, then you’ll have to pay a $15,000 penalty if you want to make new investments that would lead you to pay your adviser even one dollar more. Seniors might have to drop the advisers who help them with their 401(k) rollover.
“They have this view that you should always keep your money in the [401k] plan,” Graff said of the Obama administration. “We think that’s a dumb idea. An adviser you trust shouldn’t be blocked from working with you.”
Depending on the size of your portfolio, that could be a pretty serious tax hit. A lot of people will not opt to pay a tax that large even if it means staying with an advisor they trust. And as the Black Chamber of Commerce points out, an awful lot of black professionals who have worked hard to become financial advisors, and have earned the trust of their clients by doing good work for them, will now lose their clients. Why? All because the Obama Administration thinks it knows better than you what’s good for you, and that’s how it justifies butting into a relationship you have that you’re perfectly happy with.
And yes, the same principle applies here that applied to ObamaCare. They said you could keep your doctor and keep your insurance. What they didn’t say was that they would issue mandates that would cause your insurance to be illegal, thus forcing you to switch to a new insurer and consequently putting your doctor out of network. When all this happened, they tried to insist they didn’t break their promise because hey, it wasn’t their fault your insurance was “cut-rate.”
The same thing applies here. They’re imposing regulations and mandates that don’t make sense for financial advisors or their clients. And when people decide they have no choice but to switch advisors as a result, the White House will try to say it wasn’t their fault.
But of course it is. That’s what always happens when the government meddles in private relationships it doesn’t understand, and that don’t need its help. Black jobs matter. You’d think President Obama would appreciate that.
You’d think that. But you’d be wrong.
