Wealth Management


The efforts to combat the fiduciary rule are numerous, including an encouraging new proposal out of the house which would replace the current rule with a new one to be drafted by the SEC (not the DOL). However, aside from this, it appears that advisors are going to have a lot more time and freedom as the current version of the DOL rule looks almost certain to be delayed well beyond its January 2018 implementation date; likely to the end of 2018 or beyond. The reason why is that even the DOL is considering major revisions, such as expanding the exempt transactions list, doing away with the private right of action clause, and allowing rollovers to be exempted.

FINSUM: There is so much going on to defeat the rule it is hard to imagine there will not be big changes. We hope the SEC-driven rule being pushed by the House comes to pass, but even if it doesn’t, we think the fiduciary rule will eventually end up being toothless.


Today holds exciting news for all those hoping that the fiduciary rule will be revised or overturned. There are multiple efforts going on in the House to repeal the rule, with several bills all in various stages of approval. However, perhaps the most interesting bill with the best chances is one from the House Financial Services Committee, which is proposing a new fiduciary standard that would be written by the SEC. The bill does away with the DOL version of the rule in favor of a new one to be written by the SEC. The bill is expected to make it through the House.

FINSUM: If any of the various House efforts have a real chance of making it through the Senate, it is this one, as an SEC-drafted rule can gather some momentum behind it. We will keep a close eye on this push.

(New York)

One of the factors that seems to have kept big wirehouses on the sidelines during the fight to overturn the fiduciary rule was that fact that they stand to gain a great deal of revenue from the new regulation. The DOL’s rule basically mandates a shift from commission-based charges to AUM-based fees, which by some estimates means 50%+ more in revenue. Well, the forecasted transition in fees is happening, with Merrill Lynch and Morgan Stanley both reporting big gains in fee-based accounts. The former’s fee-based accounts grew 19% in the second quarter, while Morgan Stanley saw its grow 17%.

FINSUM: There is a lot of money to be made for the big wirehouses, which is very likely why they have not gotten behind the push against the fiduciary rule. Will it be as beneficial for wirehouse brokers?

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