(New York)

Don’t worry, this is a not a story about DOL rule resurrection. The rule remains all-but-dead. This article is about how despite the rule being effectively gone, it has succeeded in completely changing the industry. The famed Michael Kitces summarized the DOL rule’s effect this way, saying “The DOL fiduciary rule really made the discussion of fiduciary for consumers mainstream … You can’t un-ring that bell”. Barron’s focuses on the material changes to offerings in their view, saying “The short-lived standard spurred the industry to lower fees, and prompted brokerages to prune their product lineups and remove conflicts of interest from their compensation structures. These changes are expected to outlive the rule”.

FINSUM: The DOL rule may be gone, but it will certainly never be forgotten.

(New York)

Are you on the look out for income stocks? While their position in one’s portfolio is changing given rising rates, good income stocks, especially safe ones, are always of value. The S&P 500 is currently only yielding about 2%, which is now less than two-year Treasuries. However, one can find very strong stocks with 3-4% yields. Those include Target and Qualcomm, the latter of which is yielding 4.2% and is a very well-covered stock. Also check out Seagate, CenturyLink, Pitney Bowes, and Navient.

FINSUM: These picks come from what seems to be a very diligent dividend-focused manager that was recently profiled in Barron’s. Our big question is how much dividend stocks might suffer in a rising rate period.

(New York)

Fidelity appears to be on the verge of making one of the most important adoptions of cryptocurrencies by a major financial player to-date. According to Business Insider, Fidelity has just posted jobs on its site looking to hire people “to help engineer, create, and deploy a Digital Asset exchange to both a public and private cloud”. According to BI, “If Fidelity does launch a crypto exchange offering, it would arguably be among the biggest moves by a large Wall Street firm into the nascent crypto market, which stands at about $350 billion”. Fidelity already allows clients to see their crypto holdings alongside their conventional assets.

FINSUM: It sounds like Fidelity is planning to opening a crypto trading exchange. That would be a very important move to legitimate the asset class.

(New York)

Most advisors will be familiar with CITs, or collective investment trusts, but outside of wealth management, they are little discussed. Therefore, it may be interesting to learn that the industry has been growing strongly and is approaching $3 tn. A lot of the growth has been through 401(k) sponsors adding CITs to their menus. However, the products may have benefits for many, as they essentially use a mutual fund structure, but have significantly lower fees and distribution costs because they are not subject to SEC rules. According to one money manager, “CITs have always been an option for the retirement market, but once a manager sees that they can offer a CIT cost-effectively, it’s a no-brainer”.

FINSUM: This seems like a poorly understood, but potentially value option for many.

(Washington)

The DOL rule took years, seemingly millennia, to be completely worked out (and it still wasn’t good ha), and many advisors are wondering how long it might take the SEC to get to a final iteration of its pseudo-fiduciary rule. Well, the SEC has not laid out a formal schedule yet, but SEC chief Clayton said this week that he will make sure the SEC is “not going to take forever”. Many have called for the SEC to extend the comment period on the new rule past its August 7th closing date, but the SEC has not said whether it will do so.

FINSUM: We are pleased with how quickly the SEC got its first iteration of its new rule out. We hope they keep the pace up to eliminate all the regulatory limbo in which the industry might find itself.