The halted DOL fiduciary rules essentially would have forced financial advisors to enter into “Best Interest Contracts” —>
Written by Bear Hands (Editor’s note: time added)
Today, President Trump halted the Obama administration’s planned DOL fiduciary rules. The MSM is painting this move as friendly to Wall St. at the expense of the small-time investor. Total Bullsh*t.
The halted DOL fiduciary rules essentially would have forced financial advisers to enter into “Best Interest Contracts” with their clients who owned retirement accounts. The whole thing is a tangled mess of bureaucracy that’s still not very well-defined, but the response from most firms has been to minimize risks to themselves by restricting the investment vehicles available to retirement plan holders. The BICs would place so much legal risk on advisers that they would either use only the safest of safe investment vehicles that are not likely to keep up with inflation, or they would refuse to take on smaller clients because the risk would not outweigh the pay.
The end result would be to force investors into the hands of the largest investment firms in the US who can afford the aggregate legal risk of putting small investors into investments that are safe enough but grow enough. That train of thought could draw easy comparisons to the insurance companies eventually pulling out of the ACA markets.
The DOL fiduciary rule is wrapped up in anti-Wall St. packaging that delivers the small investors to companies like Goldman Sachs while pushing smaller and independent firms out of the market.
I hope this is the first step toward President Trump completely axing the rules and re-evaluating Dodd-Frank.