June 28, 2019
I'm tired. I'm tired of studies. I'm tired of special reports. I'm tired of awards. I'm tired of prizes. I'm tired of endowments. I'm tired of foundations. I'm tired of initiatives. I'm tired of pilot projects. I'm tired of mission statements. I'm tired of committees and subcommittees. I'm tired of panels and advisory boards. I'm tired of blue-ribbon experts preparing white papers. I'm tired of updates about proposals and listening tours. Which leads me to the object of my jeremiad today: the "FINRA Investor Education Foundation" (often simply referred to as the "FINRA Foundation"), which, as the organization explains its "Mission":
Established in 2003 by the Financial Industry Regulatory Authority, the FINRA Investor Education Foundation empowers underserved Americans with the knowledge, skills and tools to make sound financial decisions throughout life.
The Foundation accomplishes this mission through educational programs and research that help consumers achieve their financial goals and that protect them in a complex and dynamic world. . . .
Oh my! Empowering underserved Americans with knowledge, skills, and tools!! Underserved Americans? Under . . . served? Who comes up with this crap? I'm sorry but let's be blunt: about the only thing that's going to come out of this nonsense is papers, studies, reports, and awards -- plus all those endless updates about the same. In the end, it's more about giving the impression of effort rather than engaging in the hard work of accomplishment. We got a mission of empowerment but the batteries are not included.
How could we best gauge the accomplishments of the FINRA Foundation? My first instinct was to review the 2018 press releases that the organization posted on its website:
- FINRA Foundation Names 2018 Recipients of First Annual Military Spouse Fellowship Program Awards (11/15/18)
- CFA Institute and FINRA Foundation Study Debunks Common Myths about Millennials and Investing (10/4/18)
- FINRA Foundation Awards 2018 Ketchum Prize to Dr. Annamaria Lusardi (9/20/18)
- Military Spouses Receive Fellowships to Conduct Financial Counseling (8/6/18)
- FINRA Foundation Expands Efforts to Increase Financial Capability in Communities Nationwide (6/7/18)
- FINRA Foundation Honors Outstanding Research on Financial Capability in the United States (5/18/18)
- Across Generations, Women Trail Men in Financial Knowledge - but the Gap May Be Closing (3/28/18)
- FINRA Foundation Seeks Applicants for Military Spouse Fellowship (3/1/18)
- FINRA Foundation Announces New Appointments to Board of Directors (2/13/18)
That's the sum total of the FINRA Foundation's 2018 accomplishments towards empowering "underserved Americans with the knowledge, skills and tools to make sound financial decisions throughout life." Those nine press release announce:
- recipients of a fellowship,
- a study,
- an award,
- another fellowship naming,
- the expansion of efforts,
- the honoring of research,
- another report,
- the seeking of fellowship applicants, and
- new appointments to the Foundation's Board of Directors
Like I said: batteries are not included. None of that crap helps "consumers achieve their financial goals and that protect them in a complex and dynamic world." Okay, sure . . . some of you may say that I'm being harsh. You may say that 2018 is old news. You may urge me to turn my disapproving gaze to the events of 2019. Fine, if that'll make you happy then I'll oblige. So far, for 2019, the Foundation has posted three press releases; and as you'll see by the headlines, six months into this new year, it all amounts to little more than a report, a travelling exhibit, and the seeking of applicants for a fellowship:
- Thursday, June 20, 2019: Financial Prosperity Eludes Many Americans Despite Growing Economy and Declining Unemployment
- April 1, 2019: FINRA Foundation and ALA Announce 50 Public Libraries to Host Thinking Money for Kids Traveling Exhibition
- March 1, 2019: FINRA Foundation Seeks Applicants for Military Spouse Fellowship
http://www.finra.org/investors/highlights/finra-foundation-national-study-financial-prosperity-eludes-many-americans-despite-economy, which notes, in part, that:
The 2018 survey's insights underscore that a growing economy is not sufficient to improve people's financial lives, leading us to further explore how fintech innovations, quality financial education offerings and the rise of the gig economy may impact the financial decisions and behaviors of millions of Americans.
Yeah, sure, that's the ticket. A 2019 press release about a 2018 survey. Was June 20th a slow news day?
Then there's all that rah-rah garbage about how we're going to end poverty via fintech. How we should explore quality financial education offerings -- and to think that I always thought the solution was to provide shoddy, low-cost financial education offerings. Then there's that tidbit about the "gig economy." I doubt a lot of working-poor even know what constitutes a "gig economy." Moreover, working multiple gigs in order to hold down several minimum-wage jobs sort of makes it tough to find the time to read all of the FINRA Foundation's press releases (much less attend their award ceremonies).
But beyond all that surface silliness and nit-picking, what exactly was the compelling impetus behind the FINRA Foundation June 20th release? Apparently, it's trumpeting a survey, which disclosed that even in a so-called "growing economy," there are poor people. Wow, imagine that: There are still poor men and women in the United States. Talk about empowering the underserved! Money well spent by the FINRA Foundation!
I have long advocated for the decertification of FINRA as a "self-regulatory-organization" and its replacement by a "private sector regulator." FINRA the self-regulatory-organization regulates through a Board populated with members from Wall Street's brokerage firms and their hand-picked so-called "public" Governors. Only FINRA's member firms vote on rule proposals and amendments. Only those firms vote for elective office. In my proposed private sector regulator, the Board would be populated with representatives from the investing public, associated person, brokerage firms, regulators, and consumer advocates. Those stakeholders would vote on rule proposals and elective offices. I'd like to see the FINRA Foundation get behind my private-sector-regulator proposal rather than spend money on pointless studies.
Similarly, I have long advocated for the creation of an Anti-Fraud Fund on Wall Street to serve as a back-stop for defrauded public investors who obtain awards of compensatory damages against insolvent industry firms and registered representatives. I do not favor extending such a guaranty for punitive damages or "unreasonable" attorneys' fees and other charges, but I believe that the securities industry has the wherewithal and the moral/ethical obligation to put its money where its dirty mouth has been. While there may be legitimate debate as to how best to fund the anti-fraud fund, that only goes to the mechanics of doing the right thing. In the case of the Financial Industry Regulatory Authority, we have a self-regulatory-organization that needs to get behind this pro-consumer effort and with haste. In the case of the FINRA Financial Education Foundation, I'd like to see the organization throw its full weight behind such an initiative. To be blunt, I would just as soon de-fund the FINRA Foundation and use all of that cash to prime the pump for the Anti-Fraud Fund.
In closing, the dubious studies that endlessly emanate from America's multitude of foundations tend to inform us about stuff that we either already knew or is of no consequence to us after we learn about it Ya gotta wonder whether the money spent on such studies would be better spent by making a direct grant to those who are being studied. Just to save time and money in the future, let me propose the following headlines for FINRA Foundation press releases:
- National Study by FINRA Foundation Finds There Will Always Be a Top 1% and Bottom 1% in Strong and Weak Economies
- National Study by FINRA Foundation Finds Potential for Another Recession with Possible Recovery Followed by Cycle of Recessions and Recoveries
- National Study by FINRA Foundation Finds First Four Letters of "Commission" and "Communism" Are Exactly the Same
- National Study by FINRA Foundation Finds That No One Knows Whether To Use "Advisor" or "Adviser"
- National Study by FINRA Foundation Finds No Wall On Wall Street. President Promises to Build a Wall on Wall Street and Make Mexico Pay For It. Top Brokerage Firms Offer to Form SPV to Fund Project and SIFMA Lobbies for Tax Exemption for Syndicate Members. FINRA Appoints Blue Ribbon Panel To Draft White Paper As Part of Initiative to Explore Potential Plan to Possibly Build Wall on Wall Street. Democratic Socialist Coalition Threatens a Flash-Mob to Form a Human Wall of Underserved Americans Around Proposed Wall on Wall Street.