SEC Planning Best-Interest Standard For Brokers In 2nd Quarter

January 11, 2018 • Page 3 of 3

“That’s the wildcard,” Thompson said. “If the Fifth Circuit agrees to a preliminary injunction against the rule or vacates the rule entirely, then we’re starting back at square one and that’s where the SEC’s rule making would take on even greater importance.”

There is also legislation in Congress to kill the DOL’s fiduciary rule, as well as a rider to kill the regulaton in the spending bill that House and Senate leadership is trying to pass before the temporary budget expires January 19.

« Previous Article | Next Article »

1 Comment

Comments

Bradengl 6 years ago

I have been commenting on the DOL fiduciary rule for several years covering a multitude of issues including: 1. the fact that DOL has jurisdiction over 401K and similar products, the IRS governs IRAs and states govern insurance products 2. It seemed like a product written by lawyers for lawyers with no viable enforcement and no way to quantify the liability to the advisor because of the civil and class action element. 3. Evidently there was no understanding of simple math as fees quickly cost more than front end loads from a long term perspective the break even between a 1% fee and a 5% sales charge is less than 5 years with any sort of performance. Add it the break points for larger investments which typically reduce to zero at one million dollars and fee advisers typically don't accept clients smaller than one million dollars. Even though the client is the loser when being served by fees if that is the choice then a class C share which does not charge a front end load but does charge a 1% 12B1 fee would seem a better choice as it is part of the operating expense so is not a taxable event. 4. The line used by fee advisers is "the fee eliminates the conflict between the adviser and the client" and it puts us both on the same side and "I win when you win" when in reality the adviser wins and the client loses. 5. If the 12B1 fee is such a terrible issue as it pays the representative to continue taking care of his client after the initial investment is done then continuing to charge the adviser fee on assets that remain static is even worse. Add to that some advisers add in the value of the home, bank accounts and all assets owned by the client in determining their fee. I understand Tracy Longo is associated with the FPA so knows what side of the bread is buttered for her but this issue really needs to have all the issues laid out on the table versus only hearing from the fee side. There are whole towns that would have to consolidate their available invest able assets to qualify for some advisers minimums. What about them?

SEC Planning Best-Interest Standard For Brokers In 2nd Quarter

You are not logged in