Trump to sign executive actions targeting Obama financial regulations

[demmiblue]

Source: The Hill

President Trump will sign an executive order that could effectively kill a contentious investment adviser rule that had been a top priority of President Obama.

The president is expected to sign a pair of executive orders targeting rules imposed on the financial sector Friday, according to senior White House officials. And one of those orders takes square aim at the “fiduciary duty” rule written by the Labor Department, finalized after years of effort in June.

That rule establishes significantly stricter standards on investment advisers for retirement plans and had been fiercely opposed by the financial industry.

The second order will direct financial regulators, under the guidance of the Treasury Department, to review regulations from the Dodd-Frank financial reform law for potential revisions or outright removal.

Read more: http://thehill.com/policy/finance/317698-trump-to-sign-executive-actions-targeting-obama-financial-regulations

[OKNancy]

1. If you have investments, I'd go with Vanguard

or another "do-it-yourself" outfit.
If the advisor doesn't have to do what is best for the client, then why have one?

--- FWIW, when my mother-in-law died, we discovered her retirement plan was giving huge commissions to the banker/planner.
Boy did she get mad when my husband and his brother moved all of it out of there. We moved my husband's portion to Vanguard.

[mahatmakanejeeves]

2. I had many posts about that regulation in the Economy Forum. Back later.

Local radio station WTOP just now said something about the EO, but only as it would apply to Dodd-Frank.

Bad news for consumers. Great news for con artists.

Edited in light of Yupster's comments.

[Yupster]

11. What was your opinion of the rule

What I've seen is it forces people away from standard IRA brokerage accounts and into managed money accounts instead.

This raised costs significantly for the average investor. The industry is also moving toward moving small investors away from advisers to 800 numbers because of the rule.

Both of these trends were happening anyway. The fiduciary rule just accelerated it. Some companies were doing it anyway. The companies resisting these trends have given up and are now going along.

If the rule gets rid of some complicated expensive products that you hear advertised, I don't know as the firms I know don't allow them anyway.

[mahatmakanejeeves]

13. I'm back now. Let me point you to my most recent post about this. I just now remembered the name

of the person behind the links.

Google "Phyllis Borzi" at DU.

Some helpful links in general:

Google "Phyllis Borzi" at DU.

Google "Borzi," as in Phyllis Borzi, the Assistant Secretary of Labor for the Employee Benefits Security Administration.

If you never do anything else today, watch this video. It was broadcast on April 23, 2013.

Tonight on FRONTLINE: The Retirement Gamble

Phyllis C. Borzi appears in the show.

Please see the article about excessive 401(k) fees in the September 2013 issue of Consumer Reports

There's a ton of information here:

Employee Benefits Security Administration

Understanding Your Retirement Plan Fees

Maximize Your Retirement Savings - Tips on Using the Fee and Investment Information From Your Retirement Plan

Full disclosure: I have money in Vanguard funds.

Vanguard offers funds with active management, Jack Bogle's beliefs notwithstanding. It's like your grocery store. You can buy broccoli there, and you can buy chocolate-covered marshmallows there. They leave the choice up to you.

[Yupster]

14. I'm actually in the business

Have been for 30 years.

Therefore, you'll understand that I have to be very careful what I say on internet boards as we are such a highly regulated occupation.

So what is your opinion of the fiduciary rule? I know putting the clients' interests first sounds great, but what does it change in practice?

To me it has led to higher costs to clients, fewer investment choices and loss of advisers for small investors who often need advisers the most.

What have you seen?

On edit, one more change I've seen is it has cost firms millions as they have to figure out how to comply with the new rule.

[mahatmakanejeeves]

15. I haven't read it, so can't really say.

Full disclosure: I have a Roth IRA and various mutual funds. Just about everything is with Vanguard.

I apologize for not having much of an answer.

[Yupster]

19. Jeepers, when you said it was

bad news for consumers and good news for con artists, I figured you were pretty up on what it was, had evaluated it and found it wanting.

Since my experience was the opposite, I thought I'd get an informed view where your experiences disagreed with my experiences.

[mahatmakanejeeves]

20. All i can is to strike my remark. Obviously I spoke without thinking to the needed extent..

You'd think I'd know better by now, but I don't.

I think that I have painted with too broad a brush. I believe that the suspension or removal of this regulation raises the likelihood that the fund holder might not get advice that is wholly to his advantage, but it by no means guarantees that it is a certainty that that will occur.

Thanks for writing.

[Yupster]

21. Appreciate it, and you're not alone

I'm right now watching Bill Maher and he's going after Trump (can't blame him for that) and he lists the Fiduciary Rule as one of the outrageous things he's done while he obviously has no clue what the fiduciary rule is or does.

People need to realize that when the government passes the "Safe Mothers Act" it doesn't mean anyone against the Law is for hurting mothers. You have to look at what the law actually says and does. For all we know, the fictitious "Safe Mothers Act" could ban abortions after one month of pregnancy.

[Botany]

3. And the stock market will tank in 3 ... 2 ... 1

And watch the vultures make $$$$$$ on short sales

[muriel_volestrangler]

7. Will it tank? It looks like good opportunities to buy stocks to sell at inflated prices

via advisers who won't have the best interests of clients at heart. I'd think a bubble would be more likely, collapsing once it becomes clear the small investors have been left holding the bag.

[Bernardo de La Paz]

8. Nothing wrong with short sales. Short sales provide liquidity in the market & slow down declines. nt

[NCjack]

16. I also like short sales. It's hard work over years for a CEO

to grow the value of a company, but it is very easy work to destroy within months or less.

[jimlup]

4. Assuming no wwiii

there will be a Trump boom followed by a collapse. Start thinking 4 years ahead and where your money should be.

[bucolic_frolic]

5. I don't even think ideology is a motive at this point

it's just blind hatred for anything Obama

No nuances, no thinking, no pick and choose, just hard reverse

[IronLionZion]

6. Who's excited to lose their retirement savings?

Bastard. My parents are retiring in the next year or 2. Just in time to crash our financial markets and our economy again.

Or as Trump says, an opportunity to buy low since he's so much "smarter" than the rest of us. Asshole.

Like the poster above, I put all my stuff in Vanguard, mostly index funds, and mostly conservative funds with words like "income", "value", "bonds".

Sure we might see some "growth" after deregulation. But it will be short and all come crashing down without mercy on normal people who are not prepared for it.

[Bengus81]

12. I retired this year........

I've been dreading a Trump win for a year and now looky just two weeks into this administration what he's done and what he wants to do. This is just a full scale dismantling of the last eight years.

If Obama and Dems would have had the FDA quickly approved a cancer cure Trump and Bannon would be working overtime to make it an illegal drug.

[Mc Mike]

9. Casino capitalists on wall st getting ready to lose our money for us again.

And get really rich themselves, doing so.

Another "new" idea from the repugs, which is actually the same old idea they've always had, and is a bad idea.

But on the other hand, big financial crashes are good for promoting fascism and war. So it won't work out bad for everyone. It's an ill wind that blows no good, right dRumpfenfuhrer?

[Coventina]

10. Have I mentioned that I hate this fucker? n/t

[hollowdweller]

17. If I was Schumer, Sanders, Warren Et al

I would have every democrat on every interview repeating the following:

President Trump said he would be for the common, working american. However he is attempting pass legislation that would allow those managing your retirement accounts to act in their own financial interest rather than YOUR financial interest. The voters were lied to.

Easy, simple, shows him to be a hypocrite.

[Yupster]

18. The rule always has been

that an adviser must recommend investments that are suitable to the investor based on age, income, net worth, risk tolerance, etc.

The new rule says the adviser must recommend the investment that is in the client's best interest.

Companies don't know what that means.

If you come to me with $ 10,000 I might say you can buy a CD or a bond, or a stock or a mutual fund.

Which is in your best interest?

[mahatmakanejeeves]

22. Links to the Federal Register

.pdf:

Definition of the Term ‘‘Fiduciary’’; Conflict of Interest Rule—Retirement Investment Advice

.html:

Definition of the Term ‘‘Fiduciary’’; Conflict of Interest Rule—Retirement Investment Advice