Fiduciary Rule Hurts Fiduciaries, Says Fiduciary
Fiduciary advisors arguing for a fiduciary standard aren’t doing it out of self-interest — far from it, Tim Maurer writes in Forbes.
Opponents of the Department of Labor’s fiduciary rule, which requires retirement brokers to put clients’ interests first and was scheduled to go into effect in April, don’t want the rule because of a clear bias, according to Maurer, a fiduciary advisor and director of personal finance for Buckingham and the BAM Alliance. They stand to lose billions of dollars in profit if the rule were to go into effect, he writes. A.T. Kearney has predicted a $10 billion drop in revenues for wirehouses, broker-dealers and independent broker-dealers between 2015 and 2020, as reported previously.
But the irony is, however – at least according to Maurer – that fiduciaries would also lose out if the DOL implemented the rule.
The rule will likely be delayed following a memorandum from President Donald Trump.
According to Maurer, fiduciary advisors would lose a competitive advantage if everyone were required to act as a fiduciary. Just as Vanguard founder Jack Bogle recently wrote in a New York Times op-ed that it’s bad for business to tell clients that their interests come after the firm’s, Maurer writes that it’s good for fiduciaries if their competition takes that stance.
Informed consumers, at least, prefer advisors who act in their best interest to those who put their own or their firm’s interest first, he writes. So fiduciary advisors supporting the rule aren’t doing so out of naked self-interest, according to Maurer; they’re doing it because they’re fiduciaries.