Displaying items by tag: advisors

(New York)

The DOL’s fiduciary rule may be gone for now, but it is a long way from dead. The rule will be taking a new form in 2019, and even now, its spirit lives on in the form of a number of state-based fiduciary rules. One such is in New Jersey. However, Wall Street is putting up a massive fight to block the rule. Financial Advisor Magazine puts it this way, calling it a Battle Royale and saying it is “pitting the nation’s largest Wall Street and broker-dealer associations against comparatively tiny fiduciary advisor and financial planning associations”.

FINSUM: We think if NJ passed a comprehensive fiduciary rule, it would probably give momentum to not only the DOL, but a number of other states which are working towards this or are on the fence about it.

(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.

(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.

(New York)

Advisors need to prepare themselves for a nasty eventuality that looks like a near certainty when the market next crashes. According to a top wealth management lawyer, there are likely to be a great deal of lawsuits filed by clients against their advisors whenever the next big crash comes. The lawsuits will be focused on claims of reverse churning, or that advisors put client money in fee-baseds account in order to collect fees without offering significant advice or trading. Since switching clients into fee-based accounts (versus commission-based accounts) has been a very common practice over the last several years, the atmosphere is ripe for a massive wave of lawsuits.

FINSUM: This article is worryingly insightful. The big switch to fee-based accounts, which preceded but also corresponded to the DOL rule, might have set up advisors for some major legal headaches in the next downturn.

(New York)

If you are a strong advisor looking for a change, Deutsche Bank may be interested in speaking with you. At least that is what Deutsche Bank is saying. The US wealth management arm of the German bank says it wants to growth the ranks of its wealth advisors by 25% this year. According to the head of Americas wealth management there, the orders from the top are to “grow, grow, grow”, adding that “We’re getting dollar investment going into the unit for headcount . . . there’s great access to the management board.”

FINSUM: This is a big initiative considering that the only European brand to have any foothold in US wealth management is UBS. The other big names are all American.