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Wealth Management


The SEC rule has received a lot of attention. Those in the industry have been moderately positive on the rule because of its degree of leniency, but no one really thinks it is a good rule, especially not investor protection advocates. Today we ready an opinion of the rule by an industry laywer, and it was so compelling, we had to share it in its entirety. The below is from Steven Lofchie of Cadwalader, Wickersham & Taft LLP: “Now, in many respects, we have ended up with the worst of all possible situations: (i) the Reg. BI adopting release fails to make any strong intellectual argument for why it is not reasonable to expect that broker-dealers can be fiduciaries to their clients; (ii) Reg. BI fails to make any distinction between sophisticated and unsophisticated natural person clients (treating Warren Buffett no different from a high school dropout); (iii) Reg. BI imposes significant new obligations on broker-dealers that very well may reduce the willingness of broker-dealers to provide "full-service" brokerage to retail investors and instead result in retail investors seeking any level of advice to potentially pay a much higher charge to an investment adviser; (iv) Reg. BI fails to satisfy any of the critics who wanted a fiduciary obligation imposed on broker-dealers; and (v) states are adopting their own "suitability" rules - urged on by Commissioner Jackson - thereby moving U.S. securities regulation away from a unitary system of regulation to a fractured Brexit system.”.

FINSUM: We have never read any commentary that does justice to the new rule better than Mr. Lofchie’s. It hits the nail on the head on why it is a failure from all sides.

(New York)

Annuities are an important part of both advisors’ businesses and their clients’ portfolios. However, the options in the market can be overwhelming, especially if you are an advisor new to the asset class. The annuities business has cleaned up its act in the last few years and is finally getting some respect because of its ability to alleviate retirees’ worst fears—running out of money in retirement. Well, Barron’s has put out a list of the top 100 annuities in the market, including how to pick them. The list is quite extensive, so here is a link. The choices are broken down into numerous categories and include offerings from Lincoln National Life, Transamerica, Prudential, CUNA Mutual Group, and beyond.

FINSUM: Not only do annuities help alleviate the fear of running out of money for retirees, but they are also popular with Millennials, who are financially conservative and have a similar concern about future income.


Astute observers will have noticed that President Trump last week nominated Eugene Scalia to head the DOL following Acosta’s resignation. Even sharper readers will know that likely means the DOL’s newest version of the Fiduciary Rule is likely dead. Scalia was instrumental in the first version of the rule’s defeat last year. He was the lead counsel for SIFMA and the body of trade groups that defeated the rule. With him becoming head of the DOL, it seems highly unlikely the Labor Department would advance the newest version of the regulation.

FINSUM: We think Eugene Scalia is the DOL head that most of the industry has been waiting for. He has a reputation as a fierce anti-regulation warrior, so is hard to imagine him advancing the newest version of the Fiduciary Rule to any degree.

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