Posted on 02/03/2017 8:01:21 AM PST by ColdOne
link only....
http://www.msn.com/en-us/money/markets/trump-to-halt-obama-fiduciary-rule-order-review-of-dodd-frank/ar-AAmzOmM?OCID=ansmsnnews11
(Excerpt) Read more at msn.com ...
And the Stock Market is up
What was it again that was responsible for the housing meltdown?
Dodd-Barney Frank must be tossed, it’s a terrible rule.
With a name like “Dodd Frank” how could it be otherwise?
Stupid lending policies.
Then the government stepped in to fix it and really effed it up. The mortgage crisis would have played itself out. Truly criminal lenders (See Countrywid) needed to be dealt with criminally.
Then Dodd-Frank came along and crushed the life out of all businesses for no good reason other than to prove they could. It’s a horrific, onerous piece of rubbish.
Just the mention of President Trump doing away with it drives the market up.
Bookmarked under WINNING
“Trump also will halt another of former President Barack Obama’s regulations, hated by the financial industry, that requires advisers on retirement accounts to work in the best interests of their clients.”
I detect...bias...in the reporting.
There is definitely bias in that reporting. Just like the news commissars saying that Merrick Garland would be a centrist pick for the US Supreme Court when we all know he is a leftist in the mold of Ginsburg & Kagan.
Tangent to this is the lack of Financial Education at the High-School and College level in this Country. Don't even get me started on that one...
The government had to step in because at that point the mortgage crisis would have completely imploded. HOWEVER, when crisis averted, they should have figured out how to step back out and leave narrowly-targeted rules to prevent such a CF from happening again.
The problem, oversimplified, is that a small number of extremely big banks had insured each others’ sub-prime lending, resulting in the claimant being their own insurer by proxy. When a big enough cumulative insurance claim happened, everyone was about to crash. The government had to step in and prop everyone back up, lest the whole economy subsequently crumble.
While the government did save us from an enormous financial crash at that point, the government was also complicit in setting up the problem (sub-prime loans to borrowers likely to default), allowing the problem to fester (the insurance required to make that work turned into a circular set of dominos), and when the crisis was over they didn’t get out of the way.
If the Left doesn’t like what Trump is doing, it’s because nothing was done to resolve obvious problems for the last 8-28 years. The buck is stopping here.
Excellent. That legislation from the two Commies needs to be removed.
I am not sure about wisdom of DoddFrank repeal,but I have seen many people hurt by “financial advisors” from credit unions and insurance companies and what used to be community banks, who have a vested interest in specific investments, sell them with no regard for the client. A fiduciary rule seems reasonable and badly needed .
I’m thinking he should just disband the Consumer Financial Protection Bureau
Please forgive my ignorance (finance is not my forte) but why it is NOT a good thing for a retirement financial advisor to be a fiduciary and work in the best interest of the client? I work in the medical field and to me it’s analogous to a physician working in the best interest of the patient. Can someone please explain? Thanks, L.
You have just made the case to pay your financial advisor a fixed fee. Many advisors earn commissions when you purchase one of their recommended investments. And clearly, stock brokers want you to invest strictly in stocks, insurance agents want you to have lots of insurance, and real estate agents would love for you to invest in real estate properties they have listed.
ping!
I detect...bias...in the reporting.
That's actually a pretty neutral way to describe the fiduciary rule. The effect is as noted in taildragger's post.
It keeps the burden on the investor to figure out what the advisor's real motivation is.
” That is great if they wanted to convert and go Fee Only on their own, but to Kass Sunstein nudge them? That is not right, just like your old Policy went away with Obamacare.”
Unfortunately the market was not working. Unregulated commission based “financial advisors” were not being transparent about the fees clients were paying. In addition financial advisors were consciously steering clients to high fee investments without showing these clients lower cost alternatives with similar performance.
The appropriate regulatory rule in this situation is to require transparency which the market will not provide on its own. Simply require advisor to disclose all fees clients are paying to them, as well as fees associated with individual investments. For example, an advisor recommends a $10,000 investment in Mutual Fund A. The fund has a 5% load, and 1.5% annual administration fee. In addition the advisor bills the client 1% annually as his/her advisor fee.
In the above scenario the advisor should be required to tell the client up front the 5% load will reduce the amount invested immediately by $500. In addition the return on the fund will be reduced by 2.5% per year (the fund fee and the advisor fee). If the advisor receives any kickbacks or commissions from the fund company for securing the investment, those compensations should also be revealed. Having full information about costs (prices) up front, the client can make an informed decision in his/her best interest.
Without laws or regulations requiring pricing transparency, history demonstrates advisors and investment companies will conceal from individual clients the cost of transactions.
In summary, for markets to work efficiently, there must be complete transparency as to pricing so consumers can make informed decisions. Regulation is needed to ensure price transparency, not the type of services offered. Unfortunately too many regulatory agencies want to regulate the types of services, or how they are delivered.
The markets for health care and legal services are in need of similar price transparency. In today’s world, the internet is a powerful tool for communicating pricing information. Government’s only role should be requiring such pricing information to be truthful and complete. With accurate pricing information, consumers will make informed decisions and markets will be efficient.
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