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Saving enough money to retire can be tough. But it's next to impossible if a financial adviser is steering the client into bad investments — and getting big commissions in return. And according to the Obama administration, that's exactly what too many advisers have been doing.

Millions of Americans trying to save for retirement have ended up with investments where high fees cripple their returns over time. U.S. Labor Secretary Tom Perez says much of that is due to bad advice.

"I hear story after story of people who trusted their adviser," Perez says. Clients thought the adviser was looking out for their best interests, but "they weren't," he says.

The 'Corrosive Power' Of Hidden Fees

Perez says many financial advisers do right by their clients, but some give conflicted advice that hurts American workers. For example, an adviser might get a much bigger commission if he or she gets the client to invest in a mutual fund with fees that are very high, as opposed to a lower-fee fund that would be a better investment. Over time, those fees are very damaging.

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Obama Wants Rules That Force Brokers To Put Clients' Interests First

Your Money

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Perez says "the corrosive power" of fine print, hidden fees and "backdoor fees" means that "quite literally billions of dollars is being lost" in Americans' retirement accounts. So the Department of Labor has released proposed new rules requiring financial advisers to put the clients' interests above their own.

Experts Worry About Potential Loopholes

This is the first week that the public can submit comments on the new rules. In industry terms, the goal is to hold people who offer financial advice for retirement accounts to a legally binding "fiduciary standard." The current standard for many professionals in the industry is weaker than that.

"This is one of the most important pieces of consumer protection regulation that we can put in place for the American people," Perez says. "They should have a right when they go to get this financial advice that the person giving them this advice is looking out for their interests first."

It sounds like a laudable goal. But the proposed rule is more than 100 pages long. Many experts are concerned that loopholes could wind up in the midst of all that rule-making language.

David Swensen, Yale University's chief investment officer, says he's hopeful the final rule will make a big difference for millions of Americans. But he says, "I think the biggest threat to this rule is Wall Street's reaction." He adds, "[It] will clearly cost Wall Street in terms of the bottom line, and they're going to fight it tooth and nail."

That's because if advisers had to act as true fiduciaries they wouldn't be steering clients into mutual funds or other investment vehicles with very high fees.

So how effective will the new regulations be? At least some experts think the financial industry's lobbying has already weakened them.

"It's obvious that industry basically got to them," says Kent Smetters, an economist at the University of Pennsylvania's Wharton School. He says the new rules have a very big loophole written into them already.

'A Big Grenade' In The Room

Smetters zeroed in on a part of the new rule called the "Best Interest Contract Exemption," which he says will allow financial advisers to opt out of much of the rule and still get commissions for getting clients to invest in overpriced mutual funds.

"It essentially throws a big grenade into the room," he says. "It's not just a small little hole. The industry can drive a Mack truck through it and it really allows them to essentially continue business as usual."

Perez says he looks forward to talking with Smetters, but says, "I think we have put in place appropriate guardrails."

The Securities Industry and Financial Markets Association declined requests for an interview. The group has warned that an overly burdensome rule could raise costs for average Americans. It says it's reviewing the details of the proposal.

Department of Labor

financial advisers

retirement

Theater

Athol Fugard Breaks Fences Around 'The Painted Rocks At Revolver Creek'

Two South African artists have come together on an off-Broadway stage in New York City: One is the world-famous playwright Athol Fugard, known for his dramas critical of the cruelties of apartheid. The other is the little-known artist Nukain Mabuza, who carved out an outlet for his creative vision despite the restrictions of apartheid — and now serves as the inspiration for Fugard's latest play, The Painted Rocks at Revolver Creek, opening May 11.

Fugard emphasizes in a program note that the play is not intended to be a biographical representation. But there are core similarities. In real life as in the play, Mabuza was an unschooled black migrant farmworker who worked obsessively on an elaborately painted stone garden in the 1960s and 1970s. Though deteriorated by the elements, it can still be seen today by anyone passing through the rural South African community of Revolver Creek, located between the town of Barberton and the southern border of the Kruger National Park.

i

The artist brought vivid colors to the dun-colored landscape. Rene Lion-Cachet/Courtesy of JFC Clarke hide caption

itoggle caption Rene Lion-Cachet/Courtesy of JFC Clarke

The artist brought vivid colors to the dun-colored landscape.

Rene Lion-Cachet/Courtesy of JFC Clarke

In life as in the play, too, Mabuza had no legal rights or claims to ownership of his hillside artistry; the land belonged to the Afrikaner farmers for whom he worked and who allowed him to live there.

The stage set's yellow-and-black painted rocks can only hint at the expanse and scale of Mabuza's actual garden. Photographs of it in its heyday show a vast array of stone outcroppings and embedded boulders decorated with bold zebra-like stripes, geometric patterns in bright hues across the color spectrum, and pictograms of birds and animals. Though inanimate and set against the scrub brush of a rocky hillside, it seems mysteriously alive, evoking an otherworldly wonderland amid the scrappy grass and trees.

i

The painted rocks seem mysteriously alive. JFC Clarke/Courtesy of JFC Clarke hide caption

itoggle caption JFC Clarke/Courtesy of JFC Clarke

The painted rocks seem mysteriously alive.

JFC Clarke/Courtesy of JFC Clarke

Mabuza is often described as an outsider artist, but that term should not be taken as a slight, says JFC Clarke, an artist and photographer based in Pretoria, South Africa. Clarke first discovered Mabuza's work in the 1980s and is the author of The Painted Stone Garden of Nukain Mabuza.

Outsider art refers to the work of untrained, self-taught artists whose creative vision goes outside (hence the name) the mainstream conventions of art. Outsider artists are also often called visionary artists. In Mabuza's case that meant envisioning a dry and rocky hillside as a flowering garden overflowing with color. And that, says Clarke, showed "genius, to take a bush-covered hillside that had no obvious potential whatsoever and devise a way to create an environmental artwork."

Like other outsider artists, Mabuza was also an outsider to the society in which he lived. He was born in Mozambique and crossed the border into South Africa, probably illegally, in the early 1960s, says Clarke. He found work as a farm laborer in the one-time mining community of Revolver Creek and built a hut for himself on a stretch of unarable boulder-filled hillside that the owners had set aside for their workers. He lived alone and never married — because, he allegedly said, a wife would eat all his money for paint.

And maybe so: By the mid-1960s, Mabuza was spending as much of his minimal wages as he could on paint, says Clarke. "He would work and paint and paint and work and starve, basically. But his "garden" also grew, both larger in scope and more sophisticated in decorative design. And he became "extremely skilled" and masterful, says Clarke. "It would appear at first glance that these geometric patterns are simple to paint." But look more closely and you'll see the care and precision with which "he layered paint until it took on a tactile quality" until those layers "built up a patina of color and textures" that he describes as "seductive."

In 1975, a South African admirer named Rene Lion-Cachet arranged for a paint supplier to donate a large surplus of paint. By then, Mabuza's painted garden had become something of a tourist attraction, with buses stopping by. Visitors gazed in awe and took photographs. "He never charged; he was always welcoming, even to people who did not donate," says Clarke.

Between the tourists and the donated paint, Mabuza was able to quit his day-laborer job and devote himself to his art. Even though he did not own the land, the white farmers who did gave him permission to pursue his passion. Though they regarded him as eccentric, they "let him be," says Clarke.

About five years after that, Mabuza abandoned his garden, and in 1981 he took his own life. Clarke explains that he had evidently declared that "he wanted to be buried in his stone garden, but this was not acceptable in traditional practice and there was a confrontation." Mabuza was buried in a pauper's grave. Despite intermittent attempts to reconstruct his masterwork it has not been maintained.

Still, Mubaza's recognition is on the upswing. In addition to Fugard's play, a newly opened Barbeton Gateway garden near the site of Mabuza's original stone garden pays tribute with a decorative stone garden inspired by his work. "His name will never be forgotten because his work has taken off in a way that is remarkable by any standard," says Clarke, who was a consultant for the new garden. "He was a masterly painter. He had mastered his craft."

Athol Fugard

visionary art

outsider art

South Africa

So what if the bank paid you to take out a loan? That's what's happening in some European countries, where interest rates have gone negative amid efforts by central bankers to boost economic activity.

NPR's Audie Cornish spoke with NPR's John Ydstie about this unusual turn of financial events.

Audie Cornish: What's going on?

John Ydstie: Interest rates are being pushed so low in Europe — in fact into negative territory — that some banks are paying borrowers to take loans. And while some mortgage holders from Denmark to Spain might be quite happy about it, for the most part, the banks are not happy and are losing money as a result. If these negative rates became too widespread they could create serious problems.

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How did Europe get to this point?

Just like in the U.S., the financial crisis battered both banks and borrowers so that banks didn't want to lend and consumers didn't want to borrow. That caused the economy to stall just like it did here. So it took a while, but earlier this year the European Central Bank finally launched a bond-buying program like the Federal Reserve's. The hope was to drive down interest rates and boost borrowing. But central banks across Europe started buying so many government bonds to push down rates that bonds got scarce and in some cases the rates were pushed below zero. Those government rates are often benchmarks for mortgages. So, for instance, let's say you had a variable rate mortgage in Spain. Maybe your interest rate started out at 2 percent, but now it's possible it's fallen to negative 1 percent, meaning the bank has to give you a rebate or maybe pay down a bit more of your principal each month.

Some people who've got a mortgage would like that deal.

True, but it doesn't make bankers happy. If they're going to make money in this situation, they're going to have to charge people to take their deposits. That's not a great way to attract depositors. Instead, people might just want to stick the money under the mattress.

So this sounds a little like Bizarro World. Much as I would like to have the bank pay me interest on my mortgage, it doesn't sound healthy.

Well, there are risks posed by these ultralow and even negative rates. Banks have trouble making money in this kind of environment, and the health of eurozone banks is already a subject of debate, so that's not good. Another risk is that very low rates might reignite the European housing bubble, pushing real estate prices irrationally high because mortgage rates are so attractive. The third risk is that low or negative interest rates could cause underfunding of pension plans because many plans are required to invest in government bonds, some of which are now yielding negative rates. That could hurt retirees in the long run.

So are people starting to think that maybe the European Central Bank may have gone too far?

Yes, if these negative interest rates become entrenched it may have gone too far. But I think supporters of the policy would actually say it's working better than expected. Cash-strapped governments in Europe are paying almost nothing to borrow money by selling their sovereign bonds. That's helping bolster their finances. Businesses are paying very little to borrow, so they can invest and expand at little cost and hopefully hire people. And consumers are finding it doesn't pay much to save money by depositing it in the bank or putting it in a money fund, so they may be more inclined to spend it and help boost economic growth. In fact, today the International Monetary Fund boosted its forecast for European growth this year to 1.5 percent — not great, but a lot better than Europe has been doing recently.

AUDIE CORNISH, HOST:

So what if the bank paid you to take out a loan? That's what's happening in some European countries where interest rates have gone negative. To help us make sense of this, we're joined by our own John Ydstie, and, John, I don't really understand it (laughter). So help me understand what's going on here.

JOHN YDSTIE, BYLINE: Well, it's true, Audie. Interest rates are being pushed so low in Europe - in fact, in the negative territory - so that some banks are paying borrowers to take loans. And while some mortgage holders from Denmark to Spain might be quite happy about it, for the most part, the banks are not happy and are losing money as a result. If these negative rates become too widespread, they could become a serious problem.

CORNISH: Before we get deeper into those problems, first tell us how Europe even got to this point.

YDSTIE: Well, you know, just like the U.S., the financial crisis battered both banks and borrowers in Europe so that banks didn't want to lend and consumers didn't want to borrow. That caused the economy to stall, just like it did here. So it took a while, but earlier this year the European Central Bank finally launched a bond-buying program like the Federal Reserve's. The hope was to drive down interest rates and boost borrowing. But what happened is that the central banks across Europe started buying so many government bonds to push down rates that bonds got scarce and, in some cases, the rates were pushed below zero. Those government rates are often benchmarks for mortgages, as you know. So, for instance, let's say you had a variable rate mortgage in Spain. Maybe your interest rate started out at 2 percent. But now it's possible it's fallen to a negative 1 percent, meaning that the bank has to give you a rebate or maybe pay down a bit more of your principal each month.

CORNISH: You know, John, I think some people out there who have a mortgage might actually like that deal.

YDSTIE: True, but as we said, it doesn't make bankers happy. If they're going to make money in this situation, they're going to have to charge people to take their deposits - not a great way to attract depositors. Instead, people might just want to stick their money under the mattress.

CORNISH: This sounds a little bit like Bizarro World. I mean, as much as I would like to have the banks, say, pay me interest on my mortgage, it sounds - based on what you're saying it doesn't sound healthy.

YDSTIE: Well, as I said, there are risks posed by these ultralow and even negative rates. As we mentioned, banks have trouble making money in this kind of environment, and the health of eurozone banks is already a subject of debate, so that's not good. Another risk is that very low rates might reignite the European housing bubble, pushing real estate prices irrationally high because mortgage rates are so attractive. The third risk is that lower negative interest rates could cause underfunding of pension plans because many plans are required to invest in these government bonds, some of which are now yielding negative rates. That could hurt retirees in the long run.

CORNISH: So are people starting to think that maybe the European Central Bank may have gone too far?

YDSTIE: Well, yes. If these negative interest rates become entrenched, it may have gone too far. But I think supporters of the policy would actually say it's working better than expected. The cash-strapped governments in Europe are paying almost nothing to borrow money by selling their sovereign bonds. That's helping bolster their finances. Businesses are paying very little to borrow so they can invest and expand at little cost and hopefully hire people. And consumers are finding it doesn't pay much to save money by depositing it in the bank or putting it in a money fund, so they may be more inclined to spend it and help boost economic growth. In fact, today, the IMF upped its forecast for European growth this year to 1.5 percent. That's not great, but a lot better than Europe has been doing recently.

CORNISH: That's NPR's John Ydstie. John, thanks so much for helping us understand it.

YDSTIE: You're welcome, Audie.

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European Central Bank

banks

interest rates

Over Tokyo's Rainbow Pride Weekend in late April, Ren married her partner of four years, Yae, on stage before hundreds of Japanese strangers. They were proud to tie the knot and be part of a milestone in Japan and East Asia, a region where same-sex partnerships have never previously been recognized.

While same-sex marriage has become increasingly common in the U.S. and Western Europe, it's still rare in other parts of the world. There are signs of change in some parts of Asia. New Zealand legalized same-sex marriage in 2013 and Australia recognizes civil unions. Vietnam this year repealed a law banning same-sex marriages, though it does not officially recognize them.

No place in East Asia recognized same-sex marriages until late March, when Tokyo's trendy Shibuya ward passed a local ordinance granting same-sex couples the right to partnership certificates.

The ceremony quickly followed for Ren and Yae, who are keeping their last names private. They are among several couples that have had ceremonies recently.

"We didn't know this was going to happen," Ren said. "It was very quick."

While not legally binding, the certificates give gay couples rights to hospital visitation and shared rental agreements in the ward. Shibuya leaders expect businesses will honor the ordinance.

"Everyone has a right to become happy and they should be equal and everything, but maybe for some people in some way there had been some feeling that blocked their attitude to have more understanding towards these things," said Toshitake Kuwahara, the Shibuya ward mayor who oversaw the passage of the measure.

While the Japanese don't oppose same-sex marriage on religious grounds, change has come slowly for LGBT measures in Japan partly because of a cultural paradox. The Japanese value harmony so much that the LGBT community hasn't faced overt discrimination.

Asia

For China's Gay Community, The Show Doesn't Go On

"For better or for worse, Japan is a place that doesn't have a lot of conflict," said Fumino Sugiyama, the organizer of Pride Weekend. He's a transgender man who is now able to marry his girlfriend.

"If there were a lot of hate crimes or people felt danger, or if you weren't allowed to participate in government because you were LGBT, we would be like, 'Let's fight!' But we're not really rejected. As long are you don't make a fuss, you can get by. That's one of the big reasons it hasn't been a bigger issue," Sugiyama says.

But activists are raising their voices now. When polled by Kyodo News last year, 52 percent of Japanese said they opposed same-sex marriage rights.

"I think they were so bound to tradition in some ways, especially with the family and the way they register their family, and so any change to the family and that idea about the family is a challenge," said Jeffrey Trambley, vice president of the Equal Marriage Alliance in Japan. The non-profit is pressing lawmakers to consider granting more rights to same-sex couples.

Now, the Shibuya ordinance is paving the way for other locales.

Tokyo's Setagaya ward and the city of Yokohama are considering similar same-sex partnership policies. And a path toward marriage equality that starts in local areas — and widens — should be a familiar one for Americans. That the issue became politically viable at all is a big sign of change for Japan.

Chie Kobayashi contributed to this story.

shibuya ward

tokyo

LGBT

Marriage Equality

same sex marriage

Japan