Most advisers think the industry will continue down a fiduciary path despite rule delay

President Trump's decision to halt the DOL fiduciary rule drew mixed reactions from industry professionals

Feb 3, 2017 @ 1:16 pm

By John Waggoner and Liz Skinner

+ Zoom

News that President Donald J. Trump plans to order a stop to the DOL fiduciary rule drew mixed reactions from financial advisers. Find out how they think the efforts to implement the rule will impact their businesses and the industry going forward.

Steve Savage, CEO, Litman Gregory:

"Imagine a segment of the health care industry that is allowed to choose which drug to give a patient based how much the drug company pays them. Now imagine they argue against a rule that prevents them from prescribing $200 pills that don't work as well as $100 pills, saying it's bad for the patient because the hassle adds cost. It's that simple."

Malcolm Makin, president, Professional Planning Group:

"You cannot legislate morality. Stricter rules don't make good people better. The problem with the DOL rule is not that it doesn't make sense. It doesn't really protect the consumer. It simply makes it harder for good advisers to do their work. It has always been great business practice to put your client's interest first.

In making commissions a conflict of interest, smaller, younger and less sophisticated investors became very difficult for advisers to work with because they would usually not have enough in assets to warrant paying a fee versus utilizing a simple commission-based product."

Joe Heider, president, Cirrus Wealth Management:

"I believe that it will give the industry time to catch their breath. But that no matter what, the industry has moved toward the DOL fiduciary model as best practices."

John Anderson, managing director, SEI Investments Co.:

"The industry would be wise to continue down the path of full fiduciary business implementation. Even with the DOL rule's delay, fiduciaries should strive to put clients' interests first. We remain committed to providing a suite of fiduciary services that help our clients ease through this transition in alignment with the level-fee trend."

Eric Roberge, founder, Beyond Your Hammock:

"I've been supporting the DOL rule since the beginning because it's good for clients. Now that it's not happening, I've realized that it's actually better for my business this way. I can now continue to differentiate myself as a fiduciary."

Ray Ferrara, chairman and CEO, ProVise Management Group:

"I think it's a huge loss for the American investor to not have the total confidence of knowing that whoever is assisting them with retirement planning may not be doing it with their best interests in mind. Lots of studies say that people think their financial adviser is working in their best interests, and many are, but unfortunately, there are a significant number of people who will be hurt by people delighted that the rule not going into effect."

Gary Schatsky, CEO, ObjectiveAdvice.com; former president, NAPFA:

"It's a tremendous defeat for the public. For the first time, some rules were put in to protect the public in the financial space. This is unraveling something that the public has been clamoring for for decades. The arguments against it has been that the smaller investor needs to be protected by regulation, while the reality is that investors of all sizes have been taken in by the lack of regulation. The only positive thing that can be said is that during the rollout of DOL, more and more consumers became aware of the necessity for a fiduciary for providing advice."

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

RIA Data Center

Use InvestmentNews' RIA Data Center to filter and find key information on over 1,400 fee-only registered investment advisory firms.

Rank RIAs by

B-D Data Center

Use InvestmentNews' B-D Data Center to find exclusive information and intelligence about the independent broker-dealer industry.

Rank Broker-dealers by

Does your pay stack up?

The Adviser Research Dashboard

Based on data collected through InvestmentNews' annual adviser research studies, this interactive, customizable tool allows you to view detailed data on compensation, staffing and financial performance practices from across the industry.

Learn more »

Featured video

Events

Building digital relationships with a human touch

The word "robo" has stopped being a four-letter word for financial advisers. But how can it be an asset? Quovo's Jeff Hendren explains.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Labor's Alexander Acosta and SEC's Jay Clayton tell lawmakers they will work together on fiduciary rule

In separate appearances before Senate panels, the regulators stressed the cooperation that Republican legislators and opponents of the DOL fiduciary rule are demanding.

Brian Block denies cooking the books at Schorsch REIT

Former CFO claims everything he did was 'appropriate' and 'correct.'

Interns will take on several roles at advisory firms this summer

College students are helping with client prep, firm visioning and long-term projects, among other duties.

10 funds with largest 3-year outflows

Even well-managed funds that have beaten the S&P 500’s 10.1% average annual gain have watched investors flee.

Wirehouse training programs are back

At one time, major brokerage houses ran large, expensive training programs for thousands of young brokers, and now it looks as if they are about to return to that model.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print