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John Oliver and Tony Robbins Weigh in on Fiduciary Rule

June 15, 2016

The conversation about the fiduciary standard is spilling onto Main Street, with comedian John Oliver and self-help guru Tony Robbins joining the voices in support of having brokers hold clients’ interests first.

Oliver, the British comedian and protégé of Jon Stewart who went on to start his own HBO show, “Last Week Tonight with John Oliver,” takes issue in his most recent episode with the fact that financial advisors who sell commission-based products, such as annuities, can currently do so legally. Oliver also points out that even in 401(k) plans, various hidden fees can eat away significantly at available funds. In a segment on his show last Sunday night, Oliver used his own production company’s experience with a 401(k) plan provided by John Hancock (which has since been let go) to demonstrate the compounding effect of such fees. In the segment, Oliver also drew attention to the touted benefits of actively managed funds versus index funds.

Perhaps unsurprisingly, Oliver throws his support entirely behind the Department of Labor’s fiduciary rule and attacks the rule’s opponents. In a public service announcement of sorts, interspersed with salty language, one of the show’s actors encourages savers to do some very basic things to ensure a healthy retirement: start saving early; invest in low-cost index funds and leave them mostly alone; ask their advisor whether they’re a fiduciary; transition gradually from stocks to bonds; and keep fees under 1%.

Aaron Pottichen, retirement services practice leader at CLS Partners and a registered investment advisor, tells InvestmentNews that Oliver’s episode is a service to retirement savers, but he doubts it will foster much change. He also points out that it’s not the financial advice industry alone that’s guilty of deception: savers should be asking the questions of their brokers as well, he tells the publication. Fred Barstein, founder and chief executive of The Retirement Advisor University, tells InvestmentNews that some of the blame for indirect fees lies with 401(k) plan sponsors.

Meanwhile, celebrity self-help coach Tony Robbins has also come forward in support of the fiduciary standard — although he questions the efficacy of the DOL’s rule. Robbins, who in April was appointed chief of investor psychology at the RIA Creative Planning and is already coaching the company’s 140 financial planners, tells ThinkAdvisor that “products and advice should be separate,” because brokers at wirehouses are “working for the house.”

The DOL rule, however, isn’t likely to prevent advisors from selling products such as variable annuities, he tells the web publication.

Because brokers can tell customers that they can offer “additional choices” that “the government is taking away” under the best interest contract exemption, the rule will leave many people susceptible to such tactics, Robbins tells ThinkAdvisor.

Moreover, because the DOL doesn’t have “real enforcement” capabilities for the rule, disgruntled customers will still have to sue their financial advisors on their own, he tells the web publication.

By Alex Padalka
  • To read the Investment News article cited in this story, click here.
  • To read the ThinkAdvisor article cited in this story, click here.