Displaying items by tag: fiduciary rule

Thursday, 16 September 2021 19:51

Reg BI May Be About to Hammer This Stock

(New York)

For the most part, regulatory risk is understood well before it becomes a reality. There is a lot of uncertainty around the final rule, but generally you can prepare long in advance. That said, Reg BI may be about to cause a big problem in publicly traded markets. In particular, there is increasing speculation that Reg BI may soon be applied to everyone’s favorite darling (or the opposite), Robinhood (HOOD). The company has been under intense scrutiny for most of this year for its monetization strategies as well as its gamification of trading.

FINSUM: And this would not just be limited to Robinhood but all online trading platforms. This could lead to some significant volatility.

Published in Eq: Financials
Monday, 13 September 2021 20:01

More Rollovers are About to Be Covered by DOL Rule


Rollovers are about to see a huge change. Advisors have largely been sleeping on the effects of the new fiduciary rule, largely because the current one was drafted under Trump and is thus milder. However, what many don’t realize is that come December, rollovers are going to be a lot more complicated. According to Fred Reish, leading industry attorney, the new rule “has turned the rollover world on its head”. Speaking further and addressing compliance, he added “A whole series of steps have to be taken to adjust to this standard”.

FINSUM: Okay so here is the reality. Full implementation begins in December, but the DOL may grant a last-minute stay because it is working on a full new fiduciary rule draft (Biden’s version). In either event, the new rule will certainly not be lighter than this version.

Published in Wealth Management
Wednesday, 08 September 2021 18:57

Major Reg BI Enforcement Push Coming from SEC


The SEC is sending some very disconcerting (if you are advisor), and not so subtle signals on its plans. This version of the SEC has taken a very different tact in its appointment of critical staff. Effectively, it has closed the revolving door. And what we mean, is that in contrast to previous SECs, this one has brought almost no one in from the industry at a senior position. Instead, it is being staffed with prosecutors, consumer advocates, and other regulatory-oriented government types. The appointments seem to be a reflection of Gensler’s policies priorities and views on how he wants the SEC to conduct itself during the Biden era.

FINSUM: The SEC is sending the loudest message it possibly can without writing it on the wall. The “read between the lines” is clear: enforcement is going to be intense.

Published in Wealth Management
Tuesday, 07 September 2021 14:37

A New Fiduciary Rule Just Got Applied to Annuities

(New York)

Annuities have had a very strong 18 months or so. Ever since the pandemic began, demand has risen. Additionally, the pending inclusion of annuities in 401(k) plans will be a tailwind. However, a new regulation was just put in place in Connecticut which could spell trouble for the asset class. The state just put annuities under a best interest rule, the 16th state to do so. States have continued to use the National Association for Insurance Commissioners’ model rule as a template for covering annuities under BI legislation.

FINSUM: How far might this go? We think not too much further, if only because many of the states that would want to pass a fiduciary rule for annuities have already done so, which means that even if the DOL drags its feet on its new rule, most of the state-level regulations would have already happened.

Published in Wealth Management


If there were ever a sign of things to come from the SEC, this is it. There has been a lot of speculation about how the SEC will approach enforcement of Reg BI under new chief Gary Gensler. It is widely expected that the new administration will be much tougher than under Trump. But even with that expectation, this week’s move is big. The SEC just hired the every-broker-curses-her-name longtime head of investor protection at the Consumer Federation of America Barbara Roper as a senior adviser. Roper has been by far the biggest critic of Reg BI and was the biggest proponent of the Obama era DOL Rule.

FINSUM: The SEC could not have done a better job of signaling where things are heading. Time to buckle down on your compliance and start setting aside working capital to deal with beefed up protocols and more investigations.

Published in Wealth Management
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