Slideshow Advisers respond to fiduciary coverage

Published
  • March 01 2017, 12:16pm EST
8 Images Total

We’ve published a lot of fiduciary articles over the past several months. President Trump’s unexpected victory in November ramped up that coverage even more since it prompted a round of speculation that the rule may be scaled back, or even abolished. In fact, just before we finalized this section, the DoL proposed a 60-day delay for the rule. (See our Q&A with industry recruiter Rick Rummage for more on that issue.)

Here we’ve collected the best reader comments we’ve received on our fiduciary coverage. On each slide, we’ve included more context for the quotes, although some have been lightly edited for clarity, as well as links to the articles.

Article: CFP Board, other fiduciary advocates prep for fight to save DoL rule

Full comment: Instead of worrying about DOL, it is time for the CFP Board to look within and institute a blanket fiduciary standard. No more "fiduciary" while doing financial planning and then "anything goes" for those who then sell products non-planning clients. I suggest a simple standard modeled on the USMA honor code. "A CFP licensee shall at all times act as a fiduciary when advising or providing any services to any member of the public on any financial matter." No loopholes.

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Article: As Trump takes power, fiduciary advocates renew defense of rule

Full comment: Ms. Roper has all along disregarded that small account retirement savers will be unable to work with "a real fiduciary adviser" unless their account size is $250,000 to $500,000. And these small account retirement savers want high-quality advice but would rather that a financial professional receive a one-time commission from a broker-dealer or a life insurance company for episodic transactions than pay annual recurring fees. She slanders thousands of commission-based salespersons.

Article: SEC could step up if DoL fiduciary rule is overturned, FINRA CEO says

Full comment: The SEC should step up and adopt a fiduciary standard regardless of what happens on the DOL rule. But an SEC rule only covers securities, so not fixed index annuities or other insurance products. It is not a complete solution for investors any more than the DOL rule is. If the SEC does act, it must be a real fiduciary standard and not the watered down, disclosure-based standard industry has argued for. Once investors have seen what a real fiduciary standard looks like, they won't settle for less.

Opinion Article: Voices It's time for a reset on the fiduciary rule
Full comment: The DoL Rule has always been about rewarding the trial bar, not protecting investors. I hope that the new rule that emerges from the ashes of the DOL formulated one allows for greater choice and access for small investors."

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Article: Judge rules against fiduciary foes, puts onus back on Trump
Full comment: If small account retirement savers are no longer served by financial professionals as the result of DoL rules that make it uneconomical to serve them or create too much legal risk for financial professionals and financial institutions, don't expect Senator Elizabeth Warren to make up the retirement savings shortfall for millions of people.

Article: Fiduciary update: What Trump could do and how firms are reacting

Full comment: The SEC has the authority to adopt a rule that would apply to all securities accounts (though no one really expects them to act any time soon). An SEC rule would not apply to recommendations of insurance products, fixed index annuities, or other non-securities. This industry argument that an SEC rule is more inclusive is false, and they know it. But they also know they look less predatory if they can claim to support a "more inclusive" SEC rule.

Opinion Article: Voices The fiduciary rule's real shortcoming that Trump should fix
Full comment: Then have I had to pare my book of under 100k to limbo right now? Our call center will not even take them yet. We're going to force all of them to go to online trading with no advice. How does that help them? They will be lost at sea!

The DoL by its own admission has no enforcement rights to regulate IRA Accounts, instead by requiring a Best Interest Contract Exemption (BICE) the "Individual Investor" has the right to sue for breach of contract? This means enforcement and its related cost is born by the investor and not the regulator, which should have the congressional authority to act in the best interest of the public.