Donald Trump faces a steep learning curve

With Donald Trump’s shocking victory over Hillary Clinton last week, America woke up to a new reality. Financial markets churned in the aftermath of the election, with global markets initially plunging before U.S. equity markets rallied last Wednesday as investors reassessed the surprise win. Some came to the conclusion that Ms. Clinton’s loss may result in weaker regulatory scrutiny. (Health care and banking shares led the S&P 500’s climb following the election.) The volatility reflects the uncertainty that grips both the political establishment and financial circles.

POLITICAL OUTSIDER

The billionaire real estate developer turned reality TV star turned political upstart clearly has an unconventional background. The political outsider must now make yet another transition to live up to the august title of President of the United States. Let us hope he can make that transformation.
Over the course of the campaign there were disturbing revelations about candidate Trump, who exhibited abhorrent behavior that the electorate overlooked. Given his treatment of women, political rivals and the press, to name a few, there remains substantial cause for concern. We have the highest expectations that as President-elect Trump, he can make the change to become more “presidential.”
There are early signs of hope. In his first remarks after winning, Mr. Trump was conciliatory, saying, “It is time for us to come together as a united people.”
Ms. Clinton too said in her concession speech that the country hopes Mr. Trump “will be a successful president for all Americans.”
“We owe him an open mind and a chance to lead,” she said.
The open question is how will Mr. Trump lead? And who will he pick to govern? The stakes are huge, and he has no track record for governing. Everything from the Dodd-Frank financial reforms to Obamacare, from Federal Reserve policy to the makeup of the Supreme Court, and, yes, the DOL fiduciary rule, is now in play.

(Related read: Trump victory puts DOL fiduciary rule in limbo)

The hard-fought DOL rule requires that financial advisers act in the best interests of their clients in retirement accounts to help protect consumers from conflicted advice. Prior to his election, one of Mr. Trump’s advisers, Anthony Scaramucci, managing partner of SkyBridge Capital, said that as president, Mr. Trump would repeal the DOL fiduciary rule. Now that Mr. Trump will be taking office, we call upon the new administration to deliberate more soberly on this singularly important rule for the financial services industry.

(Related read: Knut Rostad: Trump adviser Anthony Scaramucci should apologize for DOL fiduciary rule remarks)

Particularly, he should be wary of groups like the Financial Services Institute, a lobbying group representing independent broker-dealers, that issued a statement last week saying they “stand ready to work with [Mr. Trump’s] administration.” FSI has been a longtime critic of the DOL rule, shrouding its self-interest in a plea to ensure that Main Street Americans have access to affordable financial advice.

SPRAWLING BUREACRACY

Another reality facing the new commander in chief will be the sprawling federal bureaucracy, and the steep learning curve that awaits him when he enters the White House. Truth be told, he isn’t ready; nobody is until he (or, someday, she) steps into the job.
But our hopes are with the new president that he will put the right team in place. The DOL rule is not going to be his administration’s first priority, but adviser groups have an obligation to ensure the regulation remains on the radar. It will be up to the leaders in the advisory profession to make sure the new administration keeps consumers’ best interests at heart — and also to keep tabs on the new leadership in Washington.
As we wrote in an editorial in January in the thick of the campaign, “The latest surges by political outsider Mr. Trump and liberal insurgent Sen. Bernie Sanders on the Democratic side should make the investment advice industry sit up and take notice.”
We are all listening — and watching — now.