Displaying items by tag: SEC

Tuesday, 06 November 2018 10:08

The Midterms are a Big Risk for Financial Advisors

(Washington)

Well the midterms are finally here. However, one thing has become apparent—how these elections will affect financial advisors has not been discussed nearly enough. One of the big concerns advisors should have is about what happens if the Democrats take the House. In this scenario, it seems likely regulation would grow much toughed as fire & brimstone-like Maxine Waters (D-Calif.) would taken the helm of the House Financial Services Committee. Additionally, Republican-led deregulatory measures could be scuttled. One area of possible positivity could be on new legislation for retirees, including new measures to encourage people to save for retirement.


FINSUM: Perhaps the biggest worry regards some sort of defeat of the new SEC rule with renewed support for the DOL rule 2.0. The Democrats fiercely advocate for a comprehensive fiduciary standard, so their ascendance in the House could lead to that becoming a reality.

Published in Wealth Management

(Washington)

One of the big questions financial advisors may have about the midterms has not been discussed much. That question is how the midterm outcome may affect regulation, specifically regarding the SEC rule or forthcoming fiduciary rule 2.0. The answer is that in the most likely scenario—Democrats taking the House and Republicans holding onto the Senate—regulations would get tougher for the wealth management industry. Staunch fiduciary advocate Rep Maxine Waters (D-Calif.) would become the chair of the House Financial Services Committee, and would likely push for much tougher regulation. She has already railed against the new SEC rule for what she sees as a lack of strength.


FINSUM: Democrats taking the house could change the regulatory picture considerably. This seems likely to be one of the biggest risks to a Democrat victory for advisors.

Published in Wealth Management
Thursday, 01 November 2018 10:42

Advisors are Hating the New SEC Rule

(New York)

It is no secret, but new data is out showing just how much advisors don’t like the SEC’s new best interest rule. While there has been strong pushback about aspects of the rule, including its governance of the use of titles, there hadn’t been concrete data about how advisors felt about it. Well, now there is. A new survey from Fidelity shows that two-thirds of advisors say that the rule will either have a negative impact or won’t help. Only one third think it will have a positive impact. Interestingly, only 73% were actually aware of the SEC proposals in the first place.


FINSUM: The SEC rule is confusing and not well conceived. And when you combine with the updated DOL rule that is coming out in 2019, the new regulations could turn into a real headache.

Published in Wealth Management
Wednesday, 31 October 2018 09:53

Advisors are Ditching Best Interest Rule Preparation

(New York)

Financial advisors appear to not give a hoot about the forthcoming SEC Best Interest rule. Fatigue from the endless on-again-off-again DOL saga seems to have taken hold of the industry. A new survey by Fidelity found that 40% of advisors says that even though they are aware of the proposals, they are currently taking no action. A further 78% of advisors say they will need help in assessing and evaluating the proposals.


FINSUM: While there is definitely some fatigue, the reality is that most advisors did a lot of preparation for the fiduciary rule, and thus they think they are in a good position for the forthcoming SEC rule.

Published in Wealth Management

(Washington)

Just when it finally felt like it was gone, the fiduciary rule appears to be back from the dead. Not only is the DOL working on a new version to be debuted in 2019, but it is reportedly enforcing the current version intensely. According to ThinkAdvisor, “attorneys with Drinker, Biddle and Reath report that both the Labor Department and Securities and Exchange Commission are leveraging enforcement initiatives at a historic level of tenacity”. Fred Reish, top industry lawyer concurred, saying “Now that the fiduciary rule has been terminated, I think the focus at DOL is more on enforcement”. In terms of how the DOL is opening up investigations, a partner at Drinker, Biddle & Reath says that “They start with ‘hello, we are the DOL, show us how you do ERISA,’ and from there take a very broad based approach”.


FINSUM: We are confused by what is going on at the DOL. Following Trump’s appointment of the new chief at the DOL there seemed to be a hands-off approach being adopted (e.g. not pushing the rule further in court). Now everything seems to have reversed. Stay tuned.

Published in Wealth Management
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