Now Reading
Donald Trump wants to drop a rule that makes investors act in the best interest of their clients

Donald Trump wants to drop a rule that makes investors act in the best interest of their clients

The White House over the weekend dropped a provision that required financial advisors to act in the best interest of their clients.

The absence of the so-called fiduciary rule is sowing confusion over the fate of a regulation that was costing the industry $20 billion annually.

In a draft of the memo sent to CNBC, Trump told the Labor Department to push back on the effective date of the rule by 180 days. The POTUS told the department to conduct a review of the rule’s costs and benefits.

A White House official said 24 hours earlier that they administration planned to “defer the implementation” of the rule.

“This delay will allow the administration to potentially repeal the rule entirely,” Rep. Ann Wagner, R-Mo., said in a statement.

While the actual rule did not include language to repeal the rule, the delay will allow the Labor Department to determine how it should change the regulation before it is allowed to move forward.

The fiduciary rule will go into effect April 10 even as its ultimate fate remains in limbo.

Trump and his administration have spent his first few weeks in office attempting to unwind President Obama’s sweeping regulations on everything from healthcare to banking.

The fiduciary rule was created in an attempt to keep investors from making risky bets with client cash. Investors must also disclose certain fees received for services.

See Also

When first revealed, the Obama administration said the rule would save investors $17 billion each year in the form of lost earning recovery.

Regulatory groups against the measure said investors would be forced to place their clients in low-interest accounts that would have a negative effect on client earnings. A report by consulting firm A.T. Kearney estimated the rule would reduce industry revenue by as much as $20 billion and shift up to $2 trillion in assets.

SIFMA‘s members have long supported a best interest standard for brokers who provide personalized investment advice, but the DOL is not the right agency nor is the DOL rule the right approach,” the group revealed in a statement Friday.

The president’s draft memo referenced “pending litigation” as justification for postponing the rule’s effective date.

No further details are being offered by the Trump administration at this time.

What's Your Reaction?
In Love
Not Sure

© 2021 Hillreporter.com

Scroll To Top