Friday, 19 January 2018 10:42

SEC Makes Huge Announcement


The SEC has just made an announcement that those in financial industry, and beyond, were waiting for. That announcement was that the SEC has now all but grounded all hopes of having bitcoin ETFs. There has been a remarkable amount of hype about the chances of launching bitcoin ETFs in the hope of getting more mainstream investors involved in the asset class. However, the SEC dashed those hopes, saying “Until the questions identified above can be addressed satisfactorily, we do not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products”.

FINSUM: This was effectively an unsolicited warning not to try to shirk investor protection rules in efforts to create bitcoin ETFs. It looks like the SEC is taking a hard line here.

Published in Tech


On Wall Street has run what we consider to be a very bad article, but we thought our readers might enjoy, or cringe, in hearing about. In an article entitled “Why Financial Planners Should Support a Strong Fiduciary Rule”, the director of consumer protection for the Consumer Federation of America manages to make almost no discernible argument. Attacking those who oppose the fiduciary rule, the article fails to make any salient points in support of the current DOL version of the rule. In fact, the most interesting part of the article is actually an inadvertent support of those who oppose the DOL rule. The author acknowledges that commissions-based payments are no more inherently conflicted than fee-based accounts.

FINSUM: This article was incredibly mind-numbing. While we have been in consistent opposition to the DOL rule, we are not against fiduciary duty in principal, and have been trying to find arguments in its favor. In this piece we kept reading and reading waiting for a good point to be made, but it never arrived.

Published in Wealth Management


If there was ever exciting news in the fiduciary rule saga, this is it. The Wall Street Journal is reporting that the SEC will deliver a proposed comprehensive fiduciary rule in the second quarter of this year. The challenge of delivering a rule governing all accounts will be very challenging however, even as the SEC says it is fast-tracking development, as it will be bombarded from both sides. One of the directors from the Consumer Federation of America puts it bluntly, “It’s difficult to see how they can come up with a solution that does not land them in court … If they propose a rule we like, industry will sue them. If they give industry a disclosure-based best interest standard that they want, we’ll sue them”.

FINSUM: The SEC is in a tough position, but them coming up with a proposal for a comprehensive rule would be a step in the right direction.

Published in Wealth Management
Tuesday, 09 January 2018 09:35

GOP One Step from Eliminating Fiduciary Rule


Those hoping for a complete end to the DOL’s fiduciary rule should keep their fingers crossed, as despite political pushback, and success on slowing down the rule, the GOP is still working hard to defeat the rule. The newest chance comes in the form of a rider on the current spending bill which is designed to do away with the rule. Previous attempts at doing so have been heavily opposed by Democrats.

FINSUM: We think this one actually has a better chance of getting through. The reason why is that the tide has definitively turned against the DOL rule, and so Democrats may be more willing to give it up as a trade or concession as part of a spending deal.

Published in Wealth Management
Monday, 08 January 2018 10:20

The Fiduciary Rule Roadmap for 2018


2017 was a wild year for both the wealth management industry and for its most famous regulation—the fiduciary rule. But what will happen in 2018? The answer is a lot, and not all in the direction some might think. While the DOL rule does feel like it might be on its last legs given the long delay and SEC involvement in developing a new rule, there are some factors which might help it, or at least advance the fiduciary rule cause. For instance, industry buy-in of the rule, especially by big firms, is increasing as they realize it is more profitable to adhere because of higher revenues from fee-based accounts. Additionally, many states are working on their own rules, another factor likely to push federal rule-makers. Finally, the SEC may come out with its own universal rule this year.

FINSUM: We expect it to be another wild ride in the fiduciary saga this year. Our best bet is that the SEC will come close to making a rule this year, but that it will not be implemented until mid 2019.

Published in Wealth Management
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