The Securities and Exchange Commission (SEC) on June 3 announced an enforcement and education initiative intended to help protect teachers and their assets, including retirement funds. The initiative augments the agency’s previous efforts in that vein with additional enforcement and investor education resources. The SEC is also pursuing a similar effort on behalf of active members of the military and veterans.
The initiatives will include heightened outreach in order to educate about savings and investment, investment fees and expenses, retirement programs specific to educators and service members, and the signs that investment fraud may be threatening them or taking place. The SEC’s Enforcement Division’s Retail Strategy Task Force and the SEC’s Office of Investor Education and Advocacy will lead the efforts.
The SEC will be pursuing the initiatives in partnership with state securities regulators, as well as other state and federal law authorities. “State securities regulators have long recognized the importance of protecting those who serve our communities and our nation from financial exploitation,” said Michael S. Pieciak, President of the North American Securities Administrators Association and Commissioner of the Vermont Department of Financial Regulation, in a press release.
“Teachers, active duty military, and veterans provide tremendous service to our country, often at great personal and financial sacrifice to themselves and their families, yet far too often are targeted and fall victim to securities fraud and other misconduct,” said SEC Chairman Jay Clayton. He added that he and his colleagues “are particularly focused” on ensuring that teachers, veterans, and active duty military, whom he says “often leave financial planning to others,” know the financial services they are getting and what they are paying for them, and are aware that they can call the SEC if something seems wrong.
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Instead of reaching out to individual states, an obvious fix is to require a uniformed disclosure form for ALL FEES / EXPENSES and CHARGES associated with any 403b provider. Full disclosure would include client initials by each expense, including surrender charges along with a signature . That simple requirement would solve much of this issue. In addition, we all know the fees embedded in VA's which have been sold for twenty plus years should no longer be permitted, without at least a lifetime income rider. Insist that endorsed products MUST be offered with no fees, instead of selling other "endorsed Provider Options" that carry front end sales loads. Finally, simply install a BIC requirement, not just a suitability standard. Problem solved.