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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsRetirees Suffer as 401(k) Rollover Boom Enriches Brokers
http://www.bloomberg.com/news/2014-06-17/retirees-suffer-as-401-k-rollover-boom-enriches-brokers.htmlDoug Beal, a former AT&T mechanic specializing in air-conditioning and fire detection, says he lost about $60,000... Read More
Kathleen Tarr says AT&T Inc. (T) employees looked to her as their de facto 401(k) expert. Visiting their homes and offices, she advised them on their retirement plans as they called up balances on computer screens.
Actually, Tarr worked for Royal Alliance Associates, a brokerage firm owned by insurer American International Group Inc. (AIG) She encouraged hundreds of departing AT&T employees to roll over their retirement money into the kind of risky high-commission investments that Wall Streets self-regulatory agency warns against on its website.
Tarr and her business partner reaped hundreds of thousands of dollars a year in commissions and trips to the Bahamas and Florida resorts. Not all of her clients fared as well, and 37 of them have filed complaints against her, according to Financial Industry Regulatory Authority records reviewed by Bloomberg News. Tarr and Royal Alliance say the investment choices were appropriate.
Its scary, said Maria Lew, a former AT&T administrative assistant and Tarr client whose account balance has fallen to $100,000 from $390,000. She fears she will lose her home, and her kitchen ceiling has a gaping hole because of a leak that will strain her budget to fix. There are days when I go to sleep and I cant stop thinking about it.
yeoman6987
(14,449 posts)If it seems too good to be true, it most likely is. I wish I could be in the pitch with these folks listening to the sale. I would tell the people to keep what they have. You may make money at a slower rate, but that is better than losing a big chunk from a risk. I think it is mostly about greed of the salesman AND the customer.
abelenkpe
(9,933 posts)I doubt the retires were greedy. They were probably told that their savings were not enough and the investments were managed by professionals. I don't understand the need to blame the victims. Instead we should be doing more to regulate finance so that this type of thing never happens.
yeoman6987
(14,449 posts)They had 390K.....that is plenty of money to survive. They wanted more. I just don't remember a gun in the story being used to force anybody to take these plans.
abelenkpe
(9,933 posts)Do you do the same for rape victims? Or victims of theft or fraud? With so many financial organizations and articles telling retires they need a million dollars to retire you and calling these victims of financial fraud greedy? Rather than placing blame on those who worked and profited from workers trust? Sickening.
yeoman6987
(14,449 posts)You must have missed it in my prior post. Plus why are you bringing up other things that have zero to do with the story?