“It could have been worse” is the best we can say for the majority of regulation, and so it is with the 401(k) fiduciary rule. Legitimate concerns of a private sector squeeze from higher costs are tempered by DOL leniency on the best interest contract exemption, order taking and the timeline for implementation.
The surprise (if not completely pleasant) left a muted response from most industry players—except for the Republican Party, one of the biggest players of all.
The president is rightly criticized for a myopic focus on golf and global warming as Brussels burns and ISIS slaughters, lest decapitation distract from the unprecedented dangers of domestic energy production. Ryan’s Republicans are no better; the completely partisan and generally unpopular Obamacare still stands, as does Dodd-Frank, despite substantive challenges and symbolic votes. What chance then against regulation that at worst elicited a shrug of the shoulders and a “wait-and-see” response from those who, until its release, hysterically predicted disaster? Nonetheless, the Grand Ol’ Party last week vowed to “delay or otherwise disrupt” the rule.
A budget deal debacle and possible brokered convention is the best the current congressional majority can claim; the latter involving a candidate that makes Beatty’s Bulworth look like Benjamin Disraeli.
Which, come to think of it, may be exactly the point. Skip Schweiss, TD Ameritrade’s fiduciary fundi, rightly noted that with Syria, Iran, social strife and issues specific to their own states and districts, the rule was (and still is) likely to rate low on lawmakers’ list of election-year priorities. It’s not to say it isn’t important, it just is what it is; a wonky piece of progressive policy that most Americans (tragically) know little about. Schweiss made the point last year as an observation against it’s possible passage before Obama’s term is up. Now that it’s introduced, the point can be applied to the opposite, and lawmakers are now too busy with other matters for the fight.
What the rule and its release has shown is DOL Secretary Tom Perez to be oh-so reasonable and possessing a degree of common sense (contrived or not). His moderate, middle-of-the-road rule stood between Elizabeth Warren on one end and an industry that’s overwhelmingly “male, pale and stale” on the other. It’s as if he acted positively (vice) presidential. Which makes Ryan’s overheated response all the more maddening.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
I honestly can’t tell whether the writer is for or against the rule, but I can defintiely say that I am opposed to it, and I hope the law rule will get a complete overall once we have a Republican administration next year.
This was Eliz Warren and her buddies at AARP flexing their muscles.
The rule will destroy the opportunity for beginning investors or those with limited means to gain any human advice.
Thanks to AARP (who stands to sell robo advice to its 38 million members) the average America will now be on their own.
All because Warren needs at platform to run on and she has done nothing constructive since being an Indian at Harvard.
Federal government is intrusive and has consistently over reached its authority. This new ” rule” is simply another grap by the Federal government in attempt to control private funds.