Sometimes, ok most of the time, crisis leads to overreaction. My wife would certainly agree that I constantly overreact to situations that don't require such immediate and urgent attention.
Congress also tends to go overboard in trying to fix perceived problems by congressional over-regulation (i.e. making bad laws).
Admittedly, more bank oversight on lending would have stemmed SOME of the problems of the housing bubble, but you also had a major issue with appraisal issues, mortgage fraud, and speculative buying.
In the latest from the SEC witch-hunt on 401k fees,the SEC is proposing a reduction of the 12b-1 fees within 401k plans, qualified plans, etc.
For those that don't know, 12b-1 fees are embedded into the mutual funds that are used within 401k and other plans. Typically, employers will have 10-15 different mutual funds for employees to choose. Traditionally, instead of the employer paying those fees (audit fees, transaction fees, financial advisory fees, etc.), these are charged to the client in this fee arrangement.
Reducing this fee, however, would not only affect the large 401k industry, but also a majority of financial planning firms (like mine")
It would also mean that if this goes through, the mutual fund industry will loose a LOT of money because advisors will naturally move into areas that allow them to make a living or turn completely to a fee-based service (the law of unintended consequence once again).
We'll see.
Grace & Peace
PLW
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