Wealth Management


In what comes as a surprise to the entire industry, President Biden’s administration has just let the Trump-era version of the Fiduciary Rule go into effect. Almost everyone in wealth management thought Biden would surely use his administrations powers to stop the rule’s enactment, but they elected to let it go into effect as of this Tuesday, accompanying the announcement with positive and supportive language. The industry’s reaction was immediate and positive, while consumer advocates were disappointed as they were hoping for a more stringent rule from the Democratic administration.

FINSUM: Frankly, we take this as an incredibly positive sign for the wealth management business. This is a big signal to us that the Biden administration is not going to be as onerous and impractical on the regulatory front as many might have feared.

(New York)

In what is easily our favorite investing metaphor of the year, Kiplinger recently wrote an article that said annuities are the broccoli of investing—many people try to avoid them, but every retirement portfolio needs them. A recent study found that while most people buy auto, home, health, and life insurance, the large majority of people avoid buying insurance for one of their biggest fears—running out of money in retirement. This is exactly where annuities come in, as they are essentially insurance contacts that provide guaranteed income in retirement (depending on the type you choose). Deferred annuities are the most common option, as they defer payment for up to decades, and then start paying out upon retirement or an age threshold.

FINSUM: Advisors who are sell annuities already understand utilities, but many don’t fully grasp their use, especially given the negative aura they have had for many years. Most retirees’ portfolios can benefit from annuities.


The SEC is about to crackdown on dually-registered advisors. The regulator seems to be upset with how some firms represent themselves and their services to clients. Because of Reg BI, firms are now required to explain their business model in Form CRS. According to industry lawyers like Issa Hanna of Eversheds Sutherland, this made “distinguishing between broker-dealer and advisor services" a “hot regulatory topic”. According to Hanna, “There's an interest in the regulatory community in ensuring that dual registrants are properly distinguishing how they describe their broker-dealer advisor services and not confusing retail customers about the service delivery models and which standards of conduct, etc., apply to the types of services they're providing”. Firms need to set up good firewalls between their businesses so that if they get investigated, they have a defensible position.

FINSUM: This feels like just one of many areas the SEC is going to start to crack down on under the Biden administration.

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