National / International News

Why you should be wary of your financial adviser

Marketplace - American Public Media - Tue, 2014-08-12 11:52

Usually, it’s pretty easy to tell when someone just wants your money: the extra complimentary sales clerk, telemarketers who bungle your name or car dealers.

But what about financial advisers?

William Percy learned the hard way that they don’t always have their clients' backs.

Percy lives in Colorado, but he worked as a phone installer in California until the late '90s. Before he retired, he met with an adviser who he says gave him this pitch: “Hey, don’t take your pension and get $1,000 a month. Take this and you can get $2,400 a month.”

She sold him a variable annuity, which Percy thought he could live off for the rest of his life. But the market turned, the principal shrank and the fees piled up.

“It just wasn't as guaranteed as [she] said it was,” he explains, adding that he later found out the adviser was being paid each time she sold someone one of these products.

“To me, that was all she looked at... how many clients she could bring in,” he says.

“Financial services firms are able to portray themselves as trusted financial advisers,” says Barbara Roper, director of investor protection for the Consumer Federation of America. “They’re certainly relied upon as trusted financial advisers by investors, but many of them simply aren't subject to a requirement to act in the best interest of their investors.”

When it comes to retirement planning, Roper says the problem is a few key loopholes in the Employee Retirement Income Security Act (ERISA). One such loophole is that the people who give one-off advice don’t have to act in the client’s best interest.

Brokers just have to recommend products that are “suitable,” says Roper. “But they can recommend the worst of the suitable products, the one with the highest costs or the poorest performance if it happens to be the one that offers them the highest financial compensation.”

This can short change people of tens or even hundreds of thousands in retirement savings. ­­­

The Department of Labor is planning to propose an update to ERISA in January.

The Securities Industry and Financial Markets Association, a trade group, agrees that it would be helpful to create a uniform standard for investment advice, but is concerned that the Labor Department’s update might push firms to cut back on services to less well-off customers.

“The negative consequences are potentially so great in terms of not having access to someone to talk to, not having access to certain investment options,” says Lisa Bleier, SIFMA’s managing director and associate general counsel.

Instead, the group is advocating for the Securities and Exchange Commission to create a standard that applies more broadly, which the Department of Labor could then follow.

In the meantime, as Percy found out, access to financial advice can occasionally create more problems than it solves.

“I knew what [the adviser told] me,” he says. “But there is no way for the lay person to know everything. It’s like when you sign your automobile contract, do you know everything that’s in there?”

The World Health Organization Says Yes To An Experimental Ebola Drug

NPR News - Tue, 2014-08-12 11:45

Faced with an Ebola outbreak that keeps spreading, WHO has endorsed the idea of using unproven vaccines or treatments.

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VIDEO: First look at Land Girls memorial

BBC - Tue, 2014-08-12 11:45
The invaluable work done by tens of thousands of women during the First and Second World Wars is being commemorated in a work of art.

Pupil sex affair teacher sentenced

BBC - Tue, 2014-08-12 11:39
A woman teacher from west Cumbria is given a suspended sentence after admitting having a sexual relationship with a girl aged between 16 and 18.

VIDEO: Female superhero fighting terrorists

BBC - Tue, 2014-08-12 11:38
A designer and cartoonist in Pakistan has created a female superhero who fights terrorists, traffickers and gangsters in Karachi.

A Life Of Anxiety Documented

NPR News - Tue, 2014-08-12 11:33

John Keedy used to be uncomfortable talking about his problems with anxiety, but not anymore. He hopes his series of photos will help others with mental illness see that they're not alone.

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The Ethical Issues In Using An Experimental Ebola Drug

NPR News - Tue, 2014-08-12 11:26

The World Health Organization approved the use of an experimental Ebola drug. Now come the hard questions: Who gets a drug that is in scarce supply and how is its effectiveness determined?

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Celebrity chef bistro's council cash

BBC - Tue, 2014-08-12 11:14
More council cash is granted to help get a celebrity chef's bistro up and running in Colwyn Bay.

Robin Williams Hanged Himself In Apparent Suicide, Police Say

NPR News - Tue, 2014-08-12 10:56

The actor was found in his bedroom by his personal assistant in California, law enforcement said Tuesday. Police say Williams had been seeking treatment for depression.

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UK warns over Israel export licences

BBC - Tue, 2014-08-12 10:50
Ministers identify 12 military export licenses to Israel that they would suspend if "significant hostilities" resume in Gaza.

'Friendship set aside for World Cup semi-final'

BBC - Tue, 2014-08-12 10:45
England women's coach Gary Street and Ireland counterpart Philip ‘Goose’ Doyle will put friendship aside for their World Cup semi-final.

20 years of online shopping later...

Marketplace - American Public Media - Tue, 2014-08-12 10:39

Twenty years ago this week, someone paid $12.48 plus shipping for this:

We're not talking about Sting's 1993 album – “Ten Summoner’s Tales" – for its musical merits.  It is, in fact, pretty average as far as Sting albums go, with two hit singles and a few Grammy nominations.  No, "Ten Summoner's Tales" has made it into the annals of contemporary history as the unremarkable item purchased in the first "online secure commercial transaction." It was the sale that proved online retail safe enough to make it, well, average. 

From the New York Times on August 11, 1994

"At noon yesterday, Phil Brandenberger of Philadelphia went shopping for a compact audio disk, paid for it with his credit card and made history.

Moments later, the champagne corks were popping in a small two-story frame house in Nashua, N.H. There, a team of young cyberspace entrepreneurs celebrated what was apparently the first retail transaction on the Internet using a readily available version of powerful data encryption software designed to guarantee privacy.

Experts have long seen such iron-clad security as a necessary first step before commercial transactions can become common on the Internet, the global computer network."

Tech-watchers had high hopes for retail on that "global computer network". In March of 1994, researchers at USC's Information Sciences Institute put out a paper called "Electronic Commerce on the Internet". In a section titled "Vision", they wrote:

"Every aspect of the acquisition process is handled seamlessly; participants need never revert to off-line paper communications. Buyers can browse multimedia catalogs, solicit bids and place orders. Sellers can respond to bids, schedule production, and coordinate deliveries. Third parties lubricate the marketplace via such value-added services as specialized directories, brokering, referral, and vendor certification." 

After that, the phrase "e-commerce" started popping up everywhere (it was almost as pervasive as Marketplace host David Brancaccio's favorite, "information superhighway").  By 1999, the Census had begun requesting e-commerce data as part of the overall economic picture. Commerce Department surveys showed the number of people shopping online rocketed from 13 percent in 2000 to 21 percent in 2001.

Retailers waded straight into those "Fields of Gold". 

Today, those numbers have quadrupled. Forrester says approximately 69 percent of Americans regularly buy products online, and those consumers generally do 16 percent of their shopping over the Internet. In their words, more and more people shop from rooms "besides their office," like the living room or the kitchen, on tablets and cell phones –  many of which they bought online in the first place.

 To put it mildly, e-retail continues to grow:

Many Women Leave Engineering, Blame The Work Culture

NPR News - Tue, 2014-08-12 10:32

From the aerospace sector to Silicon Valley, engineering has a retention problem: Close to 40 percent of women with engineering degrees either leave the profession or never enter the field.

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Youth admits causing friends' deaths

BBC - Tue, 2014-08-12 10:29
A teenager who was not legally old enough to drive admits causing the death of his three friends in a crash in East Lothian.

In Ferguson, Calls For Justice, And Calm, After Teen's Death

NPR News - Tue, 2014-08-12 10:21

Citing safety concerns, police in the St. Louis suburb where police shot and killed an unarmed black teenager Saturday say they won't release the name of the officer who fired the shots.

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Global Parenting Habits That Haven't Caught On In The U.S.

NPR News - Tue, 2014-08-12 10:14

In Japan, kids under 10 take the subway alone. In Latin countries, they stay up until all hours. In Vietnam, mothers train kids to pee on command and take away the diapers before they turn 1.

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Emergency funds for flood damage

BBC - Tue, 2014-08-12 10:09
People evacuated from flood-hit areas return to their homes as ministers say they will consider emergency funding to help deal with the damage.

Robin Williams and the link between comedy and depression

BBC - Tue, 2014-08-12 09:51
Why do many comedians struggle with depression?

LA Clippers Sold To Former Microsoft CEO Ballmer

NPR News - Tue, 2014-08-12 09:41

The announcement by the Clippers followed an order by a California court that ruled that Shelly Sterling, wife of the team's previous owner, Donald Sterling, had the authority to sell the team.

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VIDEO: Ebola vaccines 'are promising'

BBC - Tue, 2014-08-12 09:40
US health experts say there are some "promising vaccines" close to being available to treat the Ebola virus.
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