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The horse has left the barn on the fiduciary rule
02-07-2017, 03:03 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
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The horse has left the barn on the fiduciary rule
A link that suggests that the horse has left the barn on the fiduciary rule:
https://www.washingtonpost.com/news/...=.8a06b7d7d338
It notes 3+ trillion in money moved to vanguard and Blackrock runs 4 trillion and regards itself as a fiduciary. Perhaps the rule is as is typical the govenment trying to catch up to changes in the market. It does appear that the Boogle philosophy is catching on. Note the comments about Morgan Stanley moving from 27 to 40% fee based advice over the last 8 years,
The terminal paragraph of the article "Whether the fiduciary rule stays or not, the investing public has figured out what the proper standard should be. Investors are not waiting for the government to make the finance industry put investors’ interests first. As market forces have revealed, they are insisting on it themselves."
After all one must recall that all the salespersons (who call themselves financial advisors) are dispensing is what is called advice. And a client is free to ignore the advice as many on this forum do.
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02-07-2017, 06:53 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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I >hope< it is true that investors have gotten smarter about assessing the motives of those who give them advice, and that employers/advisors now want to put their investors first because it makes good business sense. That market-based answer would be better than a heavyhanded government rule that forced commissioned brokers advisors out of the market. But I'm not optimistic. When people are offered something for "free," the lure is very powerful. That, coupled with the very low state of knowledge among the general public regarding investing (i.e can't judge the quality of the advice they are receiving), is fertile ground for mischief. It thrived before, and if the rules are changed back, it will thrive again.
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02-07-2017, 10:40 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,194
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The fiduciary rule is for all the people who have little or no financial knowledge..... the ones who do either do their own investing or find someone who is a fiduciary....
I met a FA... he is giving out investing and insurance advice to his clients... but the guy is a basket case.... he has a lot of debt and no savings at all... he is bad at making child support payments and the agreed 'alimony' payments to his 3rd wife (I think his second was married so short she did not get anything).... he is putting his clients in things that have very high fees and gets him fees... but, he just does not know how to manage money... so why should he be off the hook for the bad advice he gives I do not think he should...
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The horse has left the barn on the fiduciary rule
02-08-2017, 01:53 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Syracuse
Posts: 3,501
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The horse has left the barn on the fiduciary rule
The last cruise DW and I ever took, I ran into a guy at the pool who said its been a profitable trip as he's bought a time share at each island we've stopped at.
He was gracious enough to offer to manage my investments, but I told him I don't think I had enough assets to interest him.
When I was 18 I worked the phone system for the the local Prudential Basch branch and often overheard the guy in NYC yelling that they had to unload a certain turds on their clients that could afford it.
When it comes to money; No one is on your side.
Period.
__________________
“No, not rich. I am a poor man with money, which is not the same thing"
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02-08-2017, 11:23 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,194
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Quote:
Originally Posted by GravitySucks
The last cruise DW and I ever took, I ran into a guy at the pool who said its been a profitable trip as he's bought a time share at each island we've stopped at.
He was gracious enough to offer to manage my investments, but I told him I don't think I had enough assets to interest him.
When I was 18 I worked the phone system for the the local Prudential Basch branch and often overheard the guy in NYC yelling that they had to unload a certain turds on their clients that could afford it.
When it comes to money; No one is on your side.
Period.
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But that is the whole point of the fiduciary rule.... if they unload a turd on you, then they can get sued.... and the law would be on the investor side...
Right now, even KNOWING they were selling a turd is not a reason to lose a case...
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02-08-2017, 02:05 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Syracuse
Posts: 3,501
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Quote:
Originally Posted by Texas Proud
But that is the whole point of the fiduciary rule.... if they unload a turd on you, then they can get sued.... and the law would be on the investor side...
Right now, even KNOWING they were selling a turd is not a reason to lose a case...
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That's true. I don't think it would apply to the case of the FA in my example that I think is to stupid to handle my money.
And with some one as large as Prudential I think they'd out lawyer me at any point.
Or it could all be my paranoia acting up.
__________________
“No, not rich. I am a poor man with money, which is not the same thing"
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02-08-2017, 03:34 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,668
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Financial advisors are not in the business of giving advice. Rather, they are in the business of getting paid to give advice.
__________________
Part-Owner of Texas
Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx
In dire need of: faster horses, younger woman, older whiskey, more money.
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02-08-2017, 07:59 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2013
Posts: 11,078
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Quote:
Originally Posted by mickeyd
Financial advisors are not in the business of giving advice. Rather, they are in the business of getting paid to give advice.
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The 1%'ers are in the business of making your money theirs. Advice is free.
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02-08-2017, 10:44 PM
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#9
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Dryer sheet wannabe
Join Date: May 2016
Posts: 17
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One of the most impactful aspects of the fiduciary rule (and biggest reasons advisory firms and broker dealers fight the rule) is the right of class action. Under the new rule, it is not you vs Goliath rather it is a bunch of us vs Goliath. Without the new rule, you have no right of class action, but instead are subject to arbitration.
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02-20-2017, 09:50 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,194
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I missed this when it came out.... just ran across it...
Seems a number of courts have ruled that they cannot take the fiduciary rule away...
"Three courts have now carefully considered the full range of industry attacks on the DOL's best interest fiduciary rule, and they have firmly rejected all of them," said Stephen Hall, the legal director of Better Markets, a non-profit group that supports the rule.
https://finance.yahoo.com/news/u-cou...011824826.html
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02-21-2017, 09:50 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,134
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Quote:
Originally Posted by meierlde
A"Whether the fiduciary rule stays or not, the investing public has figured out what the proper standard should be. Investors are not waiting for the government to make the finance industry put investors’ interests first. As market forces have revealed, they are insisting on it themselves."
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Perhaps.
My area has a local 'help' website where people can ask for help on all matters from which restaurants have the best happy hour to finding financial advisors. Invariably, when people ask about financial advisors, the usual suspects are named - high cost advisors from firms whose names most of us here would recognize.
Several people, including mysel,f often recommend taking a few months, checking some books out from the library and learning to do it oneself. We make the point that it is not rocket science. I have yet to have one person say "Gosh, Chuck, what a great idea! Thanks for the recommendations!" Instead we get replies like "I'm not good at math" and "My computer doesn't work well", and "I don't have hours a week to manage my money", etc. etc. etc.
My guess is that these people, left to their own means, would retire with zero, zip and nada in their retirement portfolio. Nothing to show for the money they earned except for the questions "What happened to it all?" and "Yikes! How can I live on just Social Security?" Having an FA, may be the lesser of two evils.
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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02-21-2017, 09:59 AM
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#12
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Full time employment: Posting here.
Join Date: Apr 2014
Location: Houston
Posts: 957
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Quote:
Originally Posted by Texas Proud
I missed this when it came out.... just ran across it...
Seems a number of courts have ruled that they cannot take the fiduciary rule away... "Three courts have now carefully considered the full range of industry attacks on the DOL's best interest fiduciary rule, and they have firmly rejected all of them," said Stephen Hall, the legal director of Better Markets, a non-profit group that supports the rule.
https://finance.yahoo.com/news/u-cou...011824826.html
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I read this a bit differently. Looks like people attacking the law as unacceptable for various reasons were rebuffed by the courts. I don't see the courts saying that the law cannot be changed by the lawmakers. Would be rather strange if that were the case, quite a change to our system to prevent lawmakers from making/changing laws.
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02-21-2017, 11:42 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,194
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Quote:
Originally Posted by Whisper66
I read this a bit differently. Looks like people attacking the law as unacceptable for various reasons were rebuffed by the courts. I don't see the courts saying that the law cannot be changed by the lawmakers. Would be rather strange if that were the case, quite a change to our system to prevent lawmakers from making/changing laws.
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I do not see how you can read that since it clearly states that the courts are not going to change the law... it states that the rule was upheld...
A U.S. federal judge on Wednesday upheld an Obama-era rule designed to avoid conflicts of interests when brokers give retirement advice, in a possible setback for President Donald Trump's efforts to scale back government regulation.
The Labor dept requested a stay to delay the rule, but it was not granted... I do think that this is not the last we are going to hear about this rule.... but right now it seems like it is going to go into effect (I do not know the effective date) unless there is other action done in the rule making part of the Labor dept...
Hence, my post that it might not be dead as suggested by the OP....
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02-21-2017, 12:19 PM
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#14
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Full time employment: Posting here.
Join Date: Apr 2014
Location: Houston
Posts: 957
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Quote:
Originally Posted by Texas Proud
I do not see how you can read that since it clearly states that the courts are not going to change the law... it states that the rule was upheld......
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The current challenges to the rule are not attempts by the lawmakers to change the law. The court case is a challenge by impacted parties challenging the existing law as written and wanting it declared unlawful. The judge ruled that the government took appropriate considerations in making the law and the parties cases were thus dismissed. That means the law stays as the lawmakers intended. The judge did not say (nor could the judge say) that the government cannot change the law if it so deemed fit to do so. It is not the judicial system's role to do that.
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02-21-2017, 01:38 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,194
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Quote:
Originally Posted by Whisper66
The current challenges to the rule are not attempts by the lawmakers to change the law. The court case is a challenge by impacted parties challenging the existing law as written and wanting it declared unlawful. The judge ruled that the government took appropriate considerations in making the law and the parties cases were thus dismissed. That means the law stays as the lawmakers intended. The judge did not say (nor could the judge say) that the government cannot change the law if it so deemed fit to do so. It is not the judicial system's role to do that.
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I agree with your stmt.... and if you read my post that is what I said....
However, the judge did not give the rule a stay like the gvmt wanted... so as of this post the rule is set to go into effect in April... even with the executive order as written... that is my point... it is not yet dead.
Do I believe that they are going to try and stop it? Yes... will they succeed? I do not know... Why? Because I do not know enough about the rule making process and what has to be done to get rid of something that has been published...
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02-21-2017, 02:02 PM
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#16
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Full time employment: Posting here.
Join Date: Apr 2014
Location: Houston
Posts: 957
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Quote:
Originally Posted by Texas Proud
I agree with your stmt.... and if you read my post that is what I said.......
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I see that now in your most recent posts when I reread them. Sorry for the misunderstanding.
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