Elizabeth Warren, the hard-charging Senator from Massachusetts, has new questions for financial advisors who sell annuity products to folks nearing retirement age: If an annuity company gives advisors rewards and incentives such as resort vacations, iPads and jewelry, isn’t that a huge conflict of interest?

Warren recently made headlines in an important Senate Committee hearing at which Scott Puritz, managing director of my firm Rebalance, testified. Puritz addressed the committee and Senator Warren on the subject of high fees and conflicts of interest, a topic Warren returned to this week while investigating life insurance firms.

Among the perks offered to top sellers of annuity products: golf outings, tickets to sporting events, electronics and gift cards, even “Super Bowl-style” rings. The details are found in a report issued by her office that shows how annuity selling is more like a classic boiler-room operation than careful, thoughtful financial advice.

Of 15 firms surveyed, 13 admitted to offering the sales perks for selling annuity products, investments that typically are more costly than necessary and can tie up client money for years. “Companies shouldn’t be allowed to offer expensive vacations, prizes and other kickbacks to agents in exchange for selling costly, second-rate investment products to unsuspecting customers,” Warren said in a statement.

Along with the White House, Warren backs a proposed Department of Labor rule that would force disclosure of fees, commissions and, obviously, perks such as travel and gifts, known as meeting the “fiduciary standard” for retirement advising.

Meanwhile, a bill designed to stop the Department of Labor from acting on a fiduciary rule is working its way through Congress. Sponsored by Rep. Ann Wagner of Missouri, the bill on the face of it sounds reasonable: Let the Securities and Exchange Commission handle the question of fiduciary standards.

Except that the SEC has dawdled on fiduciary action for several years. It seems obvious that the purpose of the Wagner bill is not to produce a fiduciary rule but rather to halt the Department of Labor effort in its tracks. The White House backs the Department of Labor proposal precisely because it breaks the SEC fiduciary logjam.

Exposing conflict

People know better than to get hot-boxed in a conference room with a timeshare salesman. They understand that the person selling them two weeks in a broken-down Florida hotel as an “investment” is trying to make his sales number and collect a fat commission.

What they don’t understand — at great risk to their own retirements — is that many insurance brokers are in exactly the same business. They need to move product, no matter the risks and cost to the investor, or they won’t get that Bahamas escape or exotic cruise vacation they want, on top of an exorbitant commission.

That’s enormous pressure, and it works. People can be convinced, unfortunately, to abandon perfectly fine retirement plans that are risk-adjusted and built to serve them well in favor of shoddy, overpriced annuities that serve only the insurance company and its sales people.

It’s a real conflict of interest, one a fiduciary standard would force into the open. No wonder some people want to stop it.

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