Mr. Trump’s Easy Choice
Our new president has a lot on his plate. He's looking for help on how to proceed regarding the Department of Labor's recently enacted Fiduciary Duty Rule.
Text of Presidential Memorandum on Fiduciary Duty Rule
"Memorandum for the Secretary of Labor ...
(a) You are directed to examine the Fiduciary Duty Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice. As part of this examination, you shall prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule, which shall consider, among other things, the following: (i) Whether the anticipated applicability of the Fiduciary Duty Rule has harmed or is likely to harm investors due to a reduction of Americans' access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice; (ii) Whether the anticipated applicability of the Fiduciary Duty Rule has resulted in dislocations or disruptions within the retirement services industry that may adversely affect investors or retirees; and (iii) Whether the Fiduciary Duty Rule is likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.
"(b) If you make an affirmative determination as to any of the considerations identified in subsection (a) or if you conclude for any other reason after appropriate review that the Fiduciary Duty Rule is inconsistent with the priority identified earlier in this memorandum then you shall publish for notice and comment a proposed rule rescinding or revising the Rule, as appropriate and as consistent with law.
What is a Fiduciary?
Investopedia says: Essentially, a fiduciary is a person or organization that owes to another the duties of good faith and trust. The highest legal duty of one party to another, it also involves being bound ethically to act in the other's best interests. A fiduciary might be responsible for general well-being, but often it involves finances – managing the assets of another person, or of a group of people, for example. Money managers, bankers, accountants, executors, board members, and corporate officers can all be considered fiduciaries.
Mr. Trump, this is an easy one. It comes down to a simple question that would fit in a Tweet.
Who do you side with?
- Wall Street and the "swamp"
- The little guy
It's really that easy. If you choose #2 you should cheer (and Tweet) loudly for the crafters of the fiduciary rule as it requires financial advisors to put their client's interests first. This will especially help the group you call your base.
Now if you choose #1 people might start to think your real base is Wall Street and the "swamp." That would be sad.