GAINPLAN

What We're Reading This Week

Back

June 17, 2019

What We're Reading This Week

Author: Thad Schlaud

Topics: Careers, News, Industry Ideas

Broker Rules

Last week the SEC approved new rules and standards for brokers. This is coming on the heels of the Department of Labor’s rule being overturned in mid-2018.

Avid readers will recall that during DOL rule’s adoption I wrote about it extensively. Here is my summary and a brief excerpt:

“[L]arge commissions and internal incentives for advisors to sell their own firm’s investments represent a conflict of interest. A true fiduciary standard has no room for conflicted advice.”

Bottom line, the DOL rule didn’t do away with conflicted advice, but rather allowed that conflicted advice to be permitted as long as it was accompanied by disclosure. Despite my disappointment with the DOL standard, I saw its adoption as a step in the right direction, and when it was overturned, I saw the SEC rule as an opportunity to overcome the DOL rule’s shortcomings. Specifically, because the SEC has purview over more types of accounts than the DOL, which only oversees retirement savings. 

Ideally, I would like to see a better definition of terms. I believe that most of the industry’s problems arise from consumers not understanding when someone is giving them financial advice and when someone is selling them a product. We don’t necessarily need more rules about product sales but rather a clear job title for professionals that act as fiduciaries and a different title for salespeople. This was my hope for the SEC. Unfortunately, this aspiration was not realized:

“Wall Street’s main overseer approved new conflict-of-interest rules for brokers, a sweeping regulatory overhaul that drew criticism from investor advocates for being too lax.”

Also:

The One Issue the Left and Right Can Agree On

Wells Submission of Kik Interactive, Inc. and The Kin Ecosystem Foundation

Chinese Crypto Pioneer Pays $4.57 Million for Lunch With Warren Buffett

The Couple Who Feds Say Scammed Berkshire Hathaway for Millions

JPMorgan Revives Forced Arbitration for Credit-Card Holders

Fallen Money Manager Turns to YouTube to Explain Losses and Stranded Cash

 

 

Gainplan LLC is a Registered Investment Adviser. This blog is solely for informational purposes and not a solicitation to invest. Advisory services are only offered to clients or prospective clients where Gainplan LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gainplan LLC unless a client service agreement is in place. Please contact a financial advisory professional before making any investment.

Gainplan LLC provides links for your convenience to websites produced by other providers or industry related material. Accessing websites through links directs you away from our website. Gainplan LLC is not responsible for errors or omissions in the material on third party websites, and does not necessarily approve of or endorse the information provided. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from use of those websites.