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Proposed Labor Department regulation on retirement advice needs fixing

By ANNETTE HAMMORTREE

p05 hammortreeHammortree    The U.S. Department of Labor’s proposed fiduciary rule may be well intentioned, but if it’s not fixed it will end up hurting the very savers it aims to help – low and middle-income Americans who are already behind in planning and saving for retirement.
    I know, because I’ve been a local financial professional for 29 years. I speak to folks about their retirement options every day, and I can tell you without a doubt that this rule will make it harder for me to offer trusted, personalized financial education and information to many of my clients. And worse, it will make many important retirement products more expensive.
    To be clear, everyone agrees that financial professionals should act in their clients’ best interests. The suggestion that financial professionals like me don’t is offensive. I do it every day. On Main Street, America, where I live, you don’t get very far if you’re a shady operator.
    Is there room for improvement in the rules governing the financial services business? Of course there is. I don’t know of any business or any person that believes things can’t be better. That’s why I’m not encouraging the department to jettison its whole plan, but to fix it. The department has received thousands of suggestions on ways to improve the proposed regulation. It should take the time to get it right.
    I have a suggestion for a good place for the department to start: Don’t build a wall between me and many of my clients. The fact is, the rule is so complex that it is hard for me to see how I could provide even basic education and information about one of the most important financial products for retirement on the market today: an annuity.
    Life insurers alone underwrite annuities. They are the opposite of life insurance, which pays beneficiaries after you die. An annuity pays you while you are alive, typically in retirement.
    What makes the annuity appealing to many people is that it offers a guaranteed stream of lifetime income. Annuities allow people to create their own personal plan about their retirement savings, taking into consideration factors such as their health, other assets, longevity risk as well as their retirement goals and expectations.  One benefit of an annuity for many people is that they can receive a stream of payments that will last throughout their retirement years.
    It is not unusual for me to meet people for the first time when they are considering retirement or are recently retired. Often, they are unsure what they should do with their savings from their 401(k)s or IRAs. They ask if they should gradually take their money out of their savings to supplement Social Security. They ask if they should remain fully invested in the stock market, partially invested in the market, or out of it completely.
    The conversations can be very serious, because the consequences for wrong decisions can mean a world of difference for a person or a couple’s quality of life. I find that when I discuss annuity options with them, they cheer up. They learn that there are answers to the retirement riddle, and that they don’t have to worry so much about financing a retirement that could last 10 years, 20 years or more.
    Now, I don’t want to suggest that a conversation about annuities or any other financial product is quick and easy. Indeed, I have found that it takes days, weeks or months for people to understand all of their financial options in retirement and determine what is best for them. It makes perfect sense. After building a nest egg through years of hard work, you want to be fully confident about how you manage it.
    So, I take all the time my clients need, answer all of their questions, and together we find the solution that is right for them.
    But, despite all my years of experience, the department’s proposed regulation would discourage me from helping people with their 401(k)s and IRAs. Under their proposed regulation, I would be considered a “conflicted financial advisor” because of the way I am compensated for the time and energy I put into informing and educating my clients about their options.
    It makes no sense.
    Many financial professionals receive income through commissions. This form of compensation in no way prevents me from acting in the best interest of my clients, many of whom are my friends and family.
    Through financial products I offer, including annuities, I provide an antidote for headaches associated with money management in retirement. Where is the logic in sidelining me and many of my peers who are helping people with their transition from working life to retirement?
    The department needs to get this proposal right. It needs to return to the drawing board so that it doesn’t prevent average Americans from working with their trusted financial professionals to feel confident about their income in retirement.
    Annette Hammortree is a registered representative and financial advisor of Park Avenue Securities LLC and co-chair of the Coalition to Protect Retirement Security and Choice.

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SWIC, Webster partner for dual admissions

    BELLEVILLE — Southwestern Illinois College and Webster University have announced a dual admission program for students who intend to pursue a bachelor’s degree at Webster upon completing an associate degree at SWIC.
    SWIC President Georgia Costello welcomed Webster University President Elizabeth (Beth) J. Stroble to the Belleville Campus recently to sign the agreement. Students who meet the requirements are guaranteed acceptance into Webster with full junior status upon graduation from SWIC.
    For information, visit swic.edu/dual-admission, email This email address is being protected from spambots. You need JavaScript enabled to view it. or call (618) 235-2700, ext. 5444.