Quinn’s guide to personal finance covers the usual terrain: budgeting, consumer debt, mortgages, college funds and investments. However, not every financial writer is blessed with Quinn’s charm-a blend of Pollyanna and Mary Poppins with a snappy wit thrown in-and her sensible approach to streamlining one’s financial life make this a stellar entry in the genre.
—Publisher’s Weekly
The game’s afoot. The financial industry is beginning its stealth attack on financial reform. First up: The single speck of potential investor protection that sneaked into the new law.
If activated, the change could push brokers, planners and insurance agents toward selling their clients better investments than they might be recommending now. That happy outcome, however, depends on how the Securities and Exchange Commission writes the rules — and brokers and agents are swarming it. They have a trump card: their owned-and-operated members of Congress, who can threaten the SEC with budget cuts if it doesn’t play along. Unless investors find some effective champions of their own, the result could be even less protection than you have now.
The issue is fiduciary duty — two words that most investors don’t understand, yet that shape the financial products you’re sold and your relationship with your financial adviser…. more
Did you get a payout from a life insurance policy? Is it sitting in a special checking account provided by the insurance company?
A class action lawsuit, filed recently and amended today, slams the Prudential Insurance Company of America for taking financial advantage of beneficiaries. Pru earns 5 to 6 percent on that money, the complaint says, while crediting the accounts with an interest rate of only 0.5 to 1.2 percent. The families think that all the earnings should belong to them.
Whether Pru owes more money is up to a judge and jury to decide. At present, these accounts provide the same service that you’d get from a bank money market account and are paying about the same amount of interest. They make sense as a way of managing large lump sums, short term.
What I question is whether families are unfairly steered into this insurance-company deal when it might have been might have been better to ask for a check in the mail…. more
The Securities and Exchange Commission is preparing to break the high fixed prices you pay in sales charges when buy and sell mutual funds. It wants to clear the way for discount brokers to offer funds at a lower cost.
To that end, the commission put out a sweeping proposal earlier this month, to change the industry’s structure. Financial advisers, brokerage firms and insurance companies are filing hundreds of objections, hoping to scuttle or water down the rule. For investors, however, the changes would be a plus. You should be sending comments in support.
The SEC’s proposal comes in two parts. The first part reduces the 12b-1 fee that many investors pay now. 12b-1s are paid out of fund assets, so the higher the cost the lower your investment return…. more
I’m about to annoy you. You hate the fact that banks have been raising interest rates on credit card balances. By the rules of competition, however, the rise in visible costs will turn out to be a good thing. Fees you can see will eventually go down.
You’ve been paying high costs for credit right along, often without knowing. Some charges were hidden or hit you by surprise. Some were abusive, such as slapping you with a $35 fee for a $5 debit-card overdraft on your account. The banks have been earning an estimated $50 billion in revenues by treating their credit-card customers in underhanded ways.
Thanks to new pro-consumer laws and regulations, some of which took effect yesterday, bad practices have been reined in. As a result, the banks are trying to make up that $50 billion in other fees. For example, the average interest rate on existing credit cards rose to 14.69 percent in the second quarter, compared with 13.07 percent a year earlier, according to the market researcher, Synovate.
In other actions, banks are nipping rewards programs, raising fees for transferring balances, putting higher minimums on free checking accounts and raising fees on safe deposit boxes, among other things.
Do the new rates and fees make you mad enough to cut up those expensive cards or find a lower-cost banking institution? Excellent. That’s what cost transparency is all about. Before these reforms, you often got stuck with charges you didn’t expect. Now, you’ve got a roadmap to reducing costs…. more
Are you thinking of signing up for “courtesy” overdraft protection linked to your debit card? Hold off, until you’ve read this column. Those fees are protection, all right — a protection racket. A federal district judge, who examined the way the giant bank, Wells Fargo, handles debits, called the practice “gouging and profiteering.”
Starting this month, banks and credit unions can no longer charge you overdraft fees automatically. I wrote about those new rules earlier this week. You now have to opt-in to this spurious form of protection, by saying that you agree to the charges. Many banks are running misleading marketing campaigns, to get you to say yes.
Say no. Please say no. There’s a multi-billion-dollar loophole in the rules, which the banks are driving deceptive overdraft practices through. The Federal Reserve, which allegedly looks after consumers,kowtowed to the banks and let the loophole stand. It took Judge William Alsup in a San Francisco courtroom, to lay bare the fraud to the public eye…. more
