Delaying the Fiduciary Rule = A Dumb Move
As you may have heard, the fiduciary rule that was scheduled to be established by the Department of Labor (DOL) on April 10th of this year, has been delayed out by a month or two after all. A few weeks ago, I discussed the basics of the rule and why it is so important for the investing community to pass this rule. Unfortunately, the Congressional body in charge did not agree that the rule was necessary to be passed, and quite frankly, this was a dumb move on their part.
The rule is now scheduled to go into effect on June 9, which is supposed to allow the DOL to re-evaluate the rule per amemorandum from President Trump. He directed the DOL to re-examine the fiduciary rule’s effect on retirement savers and revise or rescind the rule accordingly.
Unfortunately, this 60-day delay is likely to be followed by another one to allow the agency adequate time to fully vet the rule. Many stakeholders asked for a longer delay, arguing that 60 days isn’t enough time to finish a review of the beleaguered rule. The agency got more than 1,000 public comments on the delay. The Obama administration’s fiduciary rule aimed to reduce the allegedly conflicted investment advice given to retirement savers.
This rule was not meant to punish advisors, but rather to protect the consumer. As it is, many advisors will now be trying to push through as many crappy products on their clients as possible, all the while not being required to disclose this action.
If you are an investor or if you still are of the mass populous that thinks this only impacts "old, rich, white guys" PLEASE do some research to see how this can have a positive impact on Wall Street and the financial world in general. There are quite a few firms that I'm sure will lose customers and even go under thanks to this new rule.