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Thrivent is Afraid of Getting Sued!

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In recent news, Thrivent Financial for Lutherans filed a lawsuit against the DOL over the new fiduciary rule and how it could prevent Thrivent from resolving disputes internally. Specifically, Thrivent is seeking a preliminary and permanent injunction against part of the rule that will allow investors to bring a class action against them.

So, why is Thrivent Financial worried about not being able to resolve disputes internally? For one, Thrivent primarily employs sales representatives who sell proprietary insurance and investment products on a commission basis, which will be considered a prohibited transaction under the new rule. Second, one of the primary sources of their total revenue comes from IRA investments and rollovers from qualified plans. In essence, Thrivent is basically claiming that they will have to completely overhaul their business structure.

Although there is not an official comment from the DOL in regard to this lawsuit, experts are curious to see if the DOL will point to statutory authority for regulating retirement accounts and whether or not they will prevail over the Federal Arbitration Act.

Although Thrivent is not the only firm dealing with this issue, it is ironic that a company that was founded and claims to operate under Christian principles is having issues with the contractual obligation to be a fiduciary. Also, the reason why the fiduciary rule and its allowable exemptions are being put into place is so firms such as Thrivent have to work in their retirement investors’ best interest. And on top of that, the fiduciary rule will help make the financial services industry a more true and honest profession, which will give investors more confidence to invest with these firms.

What are your thoughts on this case?

Water Cooler Wisdom: Third Quarter 2016

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By Mack Bekeza

The Presidential Election and What to Know

Despite the pleasant performance in the stock market for 2016, investors are becoming more doubtful about the global economy as a whole in regards to how “pleasant” future growth will be. On top of that, The U.S is having one of the most interesting presidential elections in history. With both of the leading candidates making big promises to the public, how will these proposed actions affect the economy as a whole? But perhaps the biggest question and misconception that U.S investors have is “How does the President affect the economy?”

For our response, we want to point out 3 big myths about how the President affects the economy

            1. Capital Markets perform better when Republicans are in the White House:  

Although many consider the Republican party as the “pro-business” party, if you look at the returns of the Dow Jones Industrial Average since 1897, the markets do not give a hoot about who is president.

2. Major pieces of legislation get passed once the new President assumes office:

With the exceptions of the Affordable Care Act and Dodd-Frank, The United States rarely makes major policy changes in one major swoop, rather in small increments.

3. The President has as much of an impact on the economy as consumers and businesses:

     Although the media places major scrutiny on the President over the U.S Economy, government spending only accounts for 17.7% of total GDP, while the remaining 82.4% comes from consumer spending, private investments, and foreign trade.

So… will this presidential election completely change the way we invest? More than likely no. However, it is important to note the U.S GDP is expected grow between 1.5 to 2% over the next decade. This is primarily due the recent and projected dismal growth in the U.S labor force along with over $30 trillion in private wealth being transferred to younger generations. In other words, it is more crucial to observe how Millennials begin to take charge of the U.S Economy rather than who becomes president.

Attached are slides that provide more detail regarding presidential elections and major leading economic indicators.

©2016 Castle Rock Investment Company. All rights reserved. Please share your insights and comments with us at Mack@CastleRockInvesting.com.

 

How May I Help You?

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Castle Rock is dedicated to making retirement transition easy for you. One of the best ways to do that is to be with you in retirement transition and throughout the different stages of your retirement. We are excited to announce that we will soon offer a Retirement Transition Service to ease the retirement process for individuals, and to provide our clients with the piece of mind that all participants are taken care of.

Because we want you to have a part in how we build this new service, please reach out to me at Ashley@CastleRockInvesting.com with your comments and goals for retirement. We will try to incorporate as much as we can into the best service for you.

Stay tuned as we introduce the details of this program!