The DOL took a very important and surprising step today. Many advisors and the industry more generally has been calling for the DOL to delay their implementation of the Fiduciary Rule, and somewhat amazingly, that is exactly what the agency just did. Referring specifically to the rule that was passed in the final few weeks of the Trump administration, the DOL is delaying implementation until the end of January 2022. Further, it will not enforce several parts of the rule, including the rollover aspect, until June 2022.
FINSUM: So the month extension isn’t that big, but will give some firms more time to get their matters in order. The bigger question is when the new Biden era DOL rule be implemented.
President Biden told CNN in a town hall this week that he just doesn’t have the votes to hike corporate taxes. Driving the divide is a substantial share of progressives who won’t allow topline taxes and higher spending bills, who are at odds with Democrats in swing states who are lobbying for the opposite. In order to pass the bill, the President would need 60 senate votes so they can bypass filibustering. They need every Democrat on board for that to happen. The White House has made clear that this is only a compromise on corporate taxes, other tax hikes are still in place. Markets are rejoicing because all the stimulus grease may be good for the economy, and now higher taxes will not eat at all the corporate profits.
FINSUM: This might avoid a lot of unneeded volatility, but other income tax and GAAP earnings taxes could be still be enough to disrupt markets.
Former Harvard bankruptcy professor Elizabeth Warren is trying to reestablish support of tighter regulation on yet another financial industry sector. Looking to alleviate financial irresponsibility, the bill restricts PE from enforcing new loans on companies in order to withdraw dividends. Additionally, the bill creates a number of protections for workers that prohibit outsourcing and secure severance pay in the event of bankruptcy. Companies like Sports Authority, Shopco, and Gymboree all filed for bankruptcy under PE the debt Warren is trying to prohibit. Warren failed to draw the appeal across the aisle previously with the bill, but is hoping to gain more traction this time around. Opponents say the bill will draw down on private funding for new and small businesses and could harm the ability to make new hires or expand their workforce.
FINSUM: Regulation like this will undoubtedly harm some small businesses but the protection and benefits could out way those restrictions, however the bill won’t likely get enough traction in its current status to reach the oval office.
Sommelier is a unique new start-up that is automizing DeFi portfolio, and it just got a huge influx in funding. Sommelier raised $23 million in their series A led by Polychain Capital. Sommelier is a software company that has developed tools to automate liquidity management without the typical middleman. The DeFi is shaping the financial world in a way traditional finance can’t and using software to enact strategies that develop and test capital allocation. Sommelier is already giving liquidity providers tools to optimize placement and concentration in liquidity pools and this further funding will add to their to the kit they have for liquidity providers.
FINSUM: This is a big step in liquid automation, and will improve the efficiency in the crypto DeFi world.
I was in the middle of the worst bear market in my career. After nearly a decade of enormous growth, the economy was self-correcting. Panic started March of 2000, and there didn't appear to be any let up with selling...see more on our partner's site
Retirement is a rising concern for many Americans, and that concern is only amplifying with one of the largest retirement populations—social security—being funded by a much smaller cohort of funders. About half of the population is concerned they will out-live their savings, and that’s justified given average life expectancy is almost 20 years longer than retirement. However, the 2019 Secure Act is opening new doors in retirement investing, annuities, by relieving employers legal liability for annuities. Rather than the typical safe assets like bonds that slowly integrate into the portfolio as one nears retirement, companies like BlackRock will also fund annuities. They aim to allocate 10% of your funds by the age 55 and take that share to nearly 1/3rd by retirement age. These annuities typically come with a fixed rate of return on the principle and these integrated 401k plans will become available starting in 2022.
FINSUM: Annuities can definitely bridge the gap for those skeptical that social security will fill their cup, but they still come with plenty of risk despite the ‘guaranteed’ income many might expect.