I am glad to hear this.

Reasons why I am glad.
1. the rule adds to the list of compliance shit I have to do daily
2. It won't do anything for helping anyone, because shady ass advisers will always be out there.
3. Everyone isn't going to be forced into a wrap account now. (this one's a joke)
4. Small accounts may still get help and serviced.

So it happened and Elizabeth Warren is pissed.

I just find it Ironic of all people that she would be against the rule.

lol....tru dat.

I will say that one thing we got out of this was the invention of the T-share.

Spot on.

It has one downside. My Wife works for a large financial institution and was about to get a seriously big promotion and raise to take a new position managing the companies plans to comply with the new rules. She got told today that the new position is holding while they wait out the Feds. That was a lot of gun money trump cost me!

Can anyone translate this into layman terms?

Explain like we're 5...

That's kind of hard.  Basically they changes the rule to say that advisors can't be compensated for selling you their products when another product they would be compensated less for would be better.  In response advisors are eliminating fees for advice.  Now they aren't being compensated either way! Yay.  Only they buried their profits in maintenance fees and end up taking more of your money anyway.



If you can stand John Oliver here's a more dumbed down "explanation"

Noooooooooooooooo.....Darn you Trump!

They wanted to make sure investors weren't charged too much for services.

The problem, how much is too much? How do you gauge value added?

It sort of all started by the vanguards and fidelity's of the world convincing people that the only thing that matters to your portfolio is fees. They don't want you to pay attention to your personal rate of return or Alpha.

The argument people always bring up is, only 10% of funds beat their benchmark. Sure, that is a true statement, but do we only buy one fund? one asset class? one sector?

That myopic view would have cost you 8-9% last year.

https://youtu.be/AXmG1ApDDZY?t=19m36s

should start at 19m 36 sec

Good.

I'm not an expert and am speaking out of my arse....but this seemed like overreaching nanny state BS.  

I can evaluate on my own if my advisor is looking out for me.  Thanks.

Schiff hit it right out of the freaking park....100% right.

When does he not?

What he doesn't mention is the alternative view to ".gov just trying to help."  A cynical view is that they were laying the groundwork for 401k "guidance" by the state, because they are broke.  The fiduciary rule would not in and of itself accomplish this, because advisors could still do EM indices, but it would be a first step.

The govt is never just trying to help...we know that.

Go on a little more about the guidance by the state...that sounds interesting...I didn't hear that one before.

The basic idea behind the rule was good.  I like to have an adviser that will advise me on MY BEST INTEREST, not their own income generation.

I do think there should be clear disclaimers in any situation where an "adviser" is NOT a fiduciary.
Then let the consumer decide if they want to take this advise or seek other opinions.  Some people are lazy or just prefer to pay someone to a handsome sum to make decisions for them, and that is fine, but to not reveal the lack of a fiduciary relationship when it is often inferred is unethical.

I also believe that the fee structure in investing is so convoluted that the average consumer can not comprehend just what it is they are paying to own a particular investment.  This needs to be overhauled.  Not everyone cares and even put simplistically not everyone will understand, but it should be clearer.

Tell that to the insurance companies....their fees are clear as mud.

Just because someone is a Fiduciary and the rules say they have to put you first doesn't mean much. Sort of like how bad guys don't follow gun laws.

It also gets more convoluted as their are dual registered people. I.E. series 7 and series 66 licensed folks. On one side they operate under the fiduciary rules of the series 66, on the other hand it's under the series 7 rules.

Let's say you just want to buy the 30 stocks in the Dow to keep cost ultra low....which way should you do? Should you pay .5% of the purchase price once and have no more fees, or should you buy those stocks in an account that has a 1% wrap fee every year?

You said you just want to deal with a fiduciary, so then now you must pay a 1% fee yearly, as opposed to the .5% one time.

The cheapest RIA wrap fees I have seen are .85% of assets in the accounts. You aren't going to get that deal unless you have 5 mil or so.

Our original thread from March last year about the fiduciary rule is here (in paid member area).  Guidance by the state is my way of saying, "forcing money into government buckets" because they are completely broke.

We already have a situation whereby the government "protects" the little guy by hamstringing advisors about what they can and can't do with peoples' money, unless the investor is "accredited,"  which IIRC is 1Mil net worth+.  Schiff himself was frustrated with this Reg D stuff right before the housing crash.  

He got in on the subprime short, but could only release a letter to his HNW clients as they are the only ones "sophisticated enough" to understand it.  Whatever.  Yea, it's tricky, but .gov has no place deciding who can and cannot handle which investment.  That's between the advisor and his client.  So basically the little guy missed out on that historic opportunity bc .gov "protected" him.

Where I am, in the institutional space, they've also already set the precedent last October with MMF "reform."  Our liquidity guys were coerced into .gov prime funds.  The exit gates scare the shit out of me, and take away from the entire point of liquidity in the first place.  Why would the .gov do this?  They can't use "protecting mom and pop" as an excuse with our billion dollar client accounts.  They simply ram it through.

There are 100 different angles to this issue in my head at the moment.  I'm trying to draw a parallel from my institutional perspective into the retail market. My main concern is that the .gov wants to force more money into government funds by handcuffing advisors, or even people managing their own money.  I just can't figure out quite how they would accomplish this.  

The fiduciary rule stinks to high heaven as the reasoning and logic behind it doesn't hold water. A few years ago Congress eyeballed the real wealth held in 401(k)s.  I know they want the money.  Will they grab their nuts and actually go for it?  If so, how?  That's what I'm trying to figure out.  

How do they force more money into silly .gov funds?  One way is to frame the advisors as crooked and greedy for non-traditional strategies in the face of this ridiculous financial situation.  I'm trying to connect the ficuciary rule to this sinister motive, but can't.  It's all speculative, circumstantial, and a "reach" to do so.  OTOH, that rule sucks.  Something is going on, I just don't know what it is.

That makes sense....and yes the Reg D stuff is typical nanny state BS. You would think they would at least set a liquid net worth max for those under 1mil LNW.

You can have someone who is in the real estate business with 5mil worth of property, but yet if they only have 900k liquid...the govt says no private placement for you.

Texas WTF you guys failed us.

Here's what Judge Barbara M.G. Lynn had to say,




Who the hell gets to decide what exactly best interest means? Also, how does she know if it's unduly burdensome, she has no experience in the field.