Elizabeth Warren Nails GOP Financial Exec

WASHINGTON -- When a financial executive refuses to answer basic questions about personal finance, you know he's in trouble.

Sen. Elizabeth Warren (D-Mass.) on Tuesday embarrassed Primerica President Peter Schneider, who Senate Republicans had invited to testify against a new regulation designed to protect retirement savings from dodgy investment managers. The Obama administration estimates that Americans lose $17 billion a year from investment professionals who manage retirement accounts by prioritizing their own financial interests over those of their clients. It has proposed a simple solution: making that illegal.

Congressional Republicans loathe the rule, but Warren's neat vivisection of Schneider underscores their difficulties in arguing against it. The GOP can usually rely on a nearly united financial industry front against Democratic regulatory proposals. This time, however, some big-name investment professionals actually support the rule, recognizing that it will purge the industry of bad actors and create business opportunities for those who don't rip off their own clients.

Schneider portrayed his company as a defender of the working class -- clients who make as little as $30,000 a year, from homes "all too often … headed by a single mother."

"We all agree that we must act in a client's best interests," Schneider said, before arguing that the Obama rule requiring managers to do just that would ultimately force Primerica to abandon its single-mother clientele

Warren presented Schneider with a Huffington Post article detailing lawsuits against the company filed by Florida workers. According to the complaints, Primerica encouraged workers nearing retirement to trade in their government-guaranteed pensions for much riskier assets -- a move that would jeopardize their savings while giving Primerica the opportunity to profit from managing their funds in the future. Had they stayed in their pensions, retirees would have simply received regular payments, leaving no fees for Primerica reps....