(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.

(New York)

Think about the financial advisor as you conceive it: an entrepreneurial professional driven by an eat-what-you-kill paradigm. For decades that has been the model, but it appears to be changing quickly. In what Barron’s calls the rise of the “advisor zombie”, many advisors are being moved to basic salary and bonus models. Since firms are exiting the broker protocol, it is becoming easier for them to lock advisors in place, and thus constrain their pay, leaving more margin for firms. The model attempts to make clients loyal to firms rather than advisors, much like a branch banker.

FINSUM: This is certainly a dystopian viewpoint, but if you take a look at changes going on in the industry, it looks like a pretty reasonable view.

(Washington)

Earlier this week it was former NYC mayor, and current Trump lawyer, Rudy Giuliani saying it. Now it is the president himself. Earlier this week, Trump confirmed on Twitter that “he has the absolute right to pardon himself”. However, after affirming his right, he followed up by saying “but why would I do that when I have done nothing wrong?”.

FINSUM: The amazing thing about that statement is it may very well be true given the broad pardoning powers of the US presidential office. However, doing so would go against the fabric of the American checks and balances system and would almost certainly get Trump impeached. We understand he is frustrated by the investigation, but he needs to walk a fine line.

(San Francisco)

Investors in Facebook, and possibly tech more broadly, need to be worried. New news has broke which says that Facebook has been sharing its data with China. The company has been sharing data with device makers like Huawei, among others. The news comes just at a time when fury over Facebook’s data policies have caused a global uproar among the public. According to the Financial Times, “Facebook shared user data including information on religious and political leanings with the device makers, and personal data collected from users who had asked for it not to be shared with third parties”.

FINSUM: We don’t know if there are legal ramifications for this, but it will certainly only add weight to the current push to subject the tech industry to greater regulation.

(Houston)

Oil has been doing very well of late. All of our readers have probably noticed it at the pump. Brent crude is currently trading around the $80 per barrel market, and all parts of the oil sector are excited after a multi-year slump. However, the market has two big problems on its hands. The first is China’s secretive oil reserves, which could be used to push prices down if the Chinese start pushing their oil into the market. Secondly, The US oil industry wants to increase output significantly and has asked OPEC for a 1mbd hike, which would once again lead to an oversupplied market.

FINSUM: We acknowledge that oil is doing well, but we are worried it will be hard to maintain current pricing because it basically relies on an oligopoly structure (cooperation on price) which we don’t think is ultimately tenable.