5f13389fd6ea4b6de49bacec84ed7d8f

So now we're going to undo the fiduciary rule and dismantle Dodd Frank. Anybody care to defend either of these actions?

jc @ 9 months ago

Comments (95)

0eda15e8a4a685a0722949782c90e863

Expenses are passed on to depositors in the form of fees and reduced benefits Lending policy is tighter than a duck's butt Small businesses suffer

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

Limits growth

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

Went from too much risk to too little

AMi @ 9 months ago

Villa Park, IL, USA

5f13389fd6ea4b6de49bacec84ed7d8f

DF has little effect on regional or community banks. The small business arguement is the normal smoke screen to hide the real intent of giving in to the big bank lobbyists.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

This was also the arguement to end Glass Steagall. That was ended by a republican congress, signed by Clinton. We know how well that turned out.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

0eda15e8a4a685a0722949782c90e863

Aside from the fact they are disappearing at an alarming rate

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

I'm actually seeing significant effect. Those who survive are doing OK mainly due to loss of competition. The consumer is ultimately the one hurt by massive regulation

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

Classic case of government not letting a crisis go to waste

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

I'm not saying nothing should have been done, I'm saying they went too far

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

Derivative transparency being one good element

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

one example, home equity loans are nearly impossible to get now, valuations 35% market being common

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

below market

AMi @ 9 months ago

Villa Park, IL, USA

5f13389fd6ea4b6de49bacec84ed7d8f

That must be a regional thing. Home mortgage money around here is almost at 2008 levels. The only difference is a higher income requirement. And that's a good thing.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

DF is really not that restrictive. Requiring three percent of capitol being held in reserve is just prudent. And if you look at the bank annual reports, they can't complain. Well I guess they can. They always do.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

0eda15e8a4a685a0722949782c90e863

I'm going to ask my investment banker friend, he's smarter than me on such items.

AMi @ 9 months ago

Elmhurst, IL, USA

0eda15e8a4a685a0722949782c90e863

Btw looking at the US as a whole, home values are not near what they peaked at ten years ago And home equity loan valuations are not on the same scale as a market valuation, just to be clear

AMi @ 9 months ago

Villa Park, IL, USA

5f13389fd6ea4b6de49bacec84ed7d8f

Home valuations are still down a little. But ten years ago they were overpriced. Thus the bubble. As far as I'm concerned, investment and banking don't belong in the same institution. I'm pretty sure that battle is lost. I'd be satisfied with

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

responsible investment. That's probably asking too much. They've proven they can't draw a line. So I favor regulating them into being financially accountable.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

Moving on. The fiduciary rule. This is so simple. It requires money managers who handle pension and 401 accounts to act in the best interest of the account holder. This scares the hell out of money managers who steer their clients into high cost

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

funds and annuities. They are more interested in their own profit than in the return of their clients.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

Most people don't have the background to make decisions regarding investment purchases. And the field is so loaded with hucksters, the odds of finding a good manager are pretty slim.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

0eda15e8a4a685a0722949782c90e863

Sounds good but mainly just weighs down small CFPs with costly operational expenses

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

Not everyone involved in financial planning is out to getcha! The honest ones deserve to set their own price, it's up to the client to request an explanation of their fees. How far should we go with the nanny state?

AMi @ 9 months ago

Villa Park, IL, USA

B35527b232c45def78db4f6949419182

Many are, and they ruined it for everyone else. They earned this rule.

Tjaden Froyda @ 9 months ago

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0eda15e8a4a685a0722949782c90e863

But it's hurting the honest ones

AMi @ 9 months ago

Villa Park, IL, USA

B35527b232c45def78db4f6949419182

How? All this rule does is prevent them from putting their own financial interest ahead of their client. This shouldn't affect honest ones, who already do that

Tjaden Froyda @ 9 months ago

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B35527b232c45def78db4f6949419182

And it hasn't been hurting anyone yet. That's a bullshït argument. The rule doesn't go into effect until April.

Tjaden Froyda @ 9 months ago

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0eda15e8a4a685a0722949782c90e863

Do you think smaller CFP operations haven't already been affected by the costs required to ensure they'll comply with the rule? What CFPs will start doing is setting higher investment minimums as smaller investors will not be worth the trouble.

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

CFPs will merge to stay viable and to offset costs (similar effect to Dodd Frank on banks/credit unions) The small to mid size investor will be left taking financial advice from Uncle Rico...I wonder how costly that will be

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

And if you're wondering who that typical investor is? Small businesses The new rule will gold clad the steeple, but allow the foundation to crack

AMi @ 9 months ago

Villa Park, IL, USA

B35527b232c45def78db4f6949419182

Wait, I thought you were concerned about the honest ones who were already complying with the rule. They won't be affected.

Tjaden Froyda @ 9 months ago

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Now those that derive a significant amount of income from taking advantage of investors under current law - they can cry me a river.

Tjaden Froyda @ 9 months ago

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What's the difference between taking financial advice from Uncle Rico and someone who wants to take advantage of you to make themselves rich. You are screwed either way.

Tjaden Froyda @ 9 months ago

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5f13389fd6ea4b6de49bacec84ed7d8f

This has no effect on the fees charged by CFPs. They can set their own rates. That is a transparent cost. This rule has to do with the hidden costs of financial vehicles. It's the difference between putting a client into a fund that has a .09%

jc @ 9 months ago

Yellow Springs, OH 45387, USA

0eda15e8a4a685a0722949782c90e863

The rule requires more than just being honest, it sets an investment mix standard which must be adhered to and this adherence must be meticulous in how it is reported. Such burdens make anyone lacking assets burdensome to the advisor.

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

You use the word significant as it is obvious what that number is. Where does the "significant" number lie exactly?

AMi @ 9 months ago

Villa Park, IL, USA

5f13389fd6ea4b6de49bacec84ed7d8f

management fee and a comparable fund with a 3.5% fee.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

And this only applies to pension accounts. Any standard investment accounts are not affected.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

0eda15e8a4a685a0722949782c90e863

Only pension accounts yes, which affects small businesses and their ability to offer competitive benefits

AMi @ 9 months ago

Villa Park, IL, USA

0eda15e8a4a685a0722949782c90e863

There will be consequences, some positive some negative I'm not sure which way the scales will tip

AMi @ 9 months ago

Villa Park, IL, USA

5f13389fd6ea4b6de49bacec84ed7d8f

The mix of investments is extremely flexible. The client is the driving force in the decision of risk level.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

A good test for choosing a FP is to tell him that you want to put 50% of your account into a Vanguard S&P index fund. If he tries to talk you out of it, look elsewhere.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

Just how small of a business are you talking about? The only way to avoid prohibitive accounting, legal, and actuarial costs would be to seek out an institutional provider who specializes in that sector.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

And damn, I'm sorry. It looks like you're being ganged up on again.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

0eda15e8a4a685a0722949782c90e863

If it wasn't for me, you and Skål would be left to ravage the landscape

AMi @ 9 months ago

Villa Park, IL, USA

5f13389fd6ea4b6de49bacec84ed7d8f

I admire the courage of your convictions. However misguided they may be. Ha!

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

And Trump's advisor on banking regulation is...... https://qz.com/903147/trumps-plans-to-undo-regulation-from-the-financial-crisis-are-insane-said-the-head-of-the-financial-crisis-inquiry-commission/

jc @ 9 months ago

Yellow Springs, OH 45387, USA

0eda15e8a4a685a0722949782c90e863

You take the high road and I'll take the low road

AMi @ 9 months ago

Villa Park, IL, USA

B35527b232c45def78db4f6949419182

Re "significant": I don't have a number, but I consider it a shady, predatory practice. If a business is freaking out right now because they rely on that income, they're the problem.

Tjaden Froyda @ 9 months ago

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B35527b232c45def78db4f6949419182

"Such burdens make anyone lacking assets burdensome to the advisor." So they won't have access to someone who gives advice based their own financial interest (not the client's). Yeah...I'm ok with that

Tjaden Froyda @ 9 months ago

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0eda15e8a4a685a0722949782c90e863

My quote and your comment aren't compatible in all instances

AMi @ 9 months ago

Naperville, IL, USA

B35527b232c45def78db4f6949419182

Of course not. But as JC mentioned, the field is overrun with hucksters. External regulation happens when you can't regulate yourself.

Tjaden Froyda @ 9 months ago

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B35527b232c45def78db4f6949419182

One of the great things DF did was provide protections against predatory lending. Stopped foreclosure mills, etc. This same group is a big target of predatory advising that the rule aimed to help.

Tjaden Froyda @ 9 months ago

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Well, not exactly the same - but still a information asymmetry problem.

Tjaden Froyda @ 9 months ago

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B35527b232c45def78db4f6949419182

Do people even know that they weren't required to act in the client's best interest to begin with?

Tjaden Froyda @ 9 months ago

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0eda15e8a4a685a0722949782c90e863

Not entirely accurate, but being a fiduciary brings bigger penalties for not complying with a more complex set of rules

AMi @ 9 months ago

Naperville, IL, USA

0eda15e8a4a685a0722949782c90e863

You can't increase the cost of doing business while simultaneously regulating income and expect good things to happen

AMi @ 9 months ago

Naperville, IL, USA

B35527b232c45def78db4f6949419182

It's not about regulating income. It's about stopping a predatory practice that churns through people's retirement funds.

Tjaden Froyda @ 9 months ago

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The industry protesting this rule sounds like an orchestra of nanoscale violins.

Tjaden Froyda @ 9 months ago

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Think of it this way. If you go to a doc, do you expect them to be looking out for your health or their pocketbook?

Tjaden Froyda @ 9 months ago

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0eda15e8a4a685a0722949782c90e863

They usually look out for both

AMi @ 9 months ago

Naperville, IL, USA

B35527b232c45def78db4f6949419182

What do you expect to take precedence?

Tjaden Froyda @ 9 months ago

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0eda15e8a4a685a0722949782c90e863

I expect the exchange to be as equitable as possible.

AMi @ 9 months ago

Naperville, IL, USA

B35527b232c45def78db4f6949419182

While I find it hard to believe you expect them to be just as focused on their pocketbook as your health, let's work with that.

Tjaden Froyda @ 9 months ago

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Imagine a scenario where the overwhelming majority of docs made choices to maximize their wealth at the expense of their patients' health.

Tjaden Froyda @ 9 months ago

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B35527b232c45def78db4f6949419182

A fiduciary rule would make sense here, right?

Tjaden Froyda @ 9 months ago

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B35527b232c45def78db4f6949419182

Keep in mind, the rule wouldn't cause the doc to lose money. They'd just make less than what they did before.

Tjaden Froyda @ 9 months ago

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0eda15e8a4a685a0722949782c90e863

How much less?

AMi @ 9 months ago

Naperville, IL, USA

0eda15e8a4a685a0722949782c90e863

You say overwhelming majority, I say an unfortunate few... Wait are we talking about radicalized Muslims or financial planners

AMi @ 9 months ago

Naperville, IL, USA

B35527b232c45def78db4f6949419182

If it's still positive, should it matter how much less? Their greed is harming their clients.

Tjaden Froyda @ 9 months ago

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Enough would be made to keep the lights on. Just not nearly as lucrative.

Tjaden Froyda @ 9 months ago

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I get hit up by financial planners all the time. I've found about 2 that pass JC's test.

Tjaden Froyda @ 9 months ago

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0eda15e8a4a685a0722949782c90e863

I can't wait to open up my business designed to make just enough to keep the lights on lol

AMi @ 9 months ago

Naperville, IL, USA

B35527b232c45def78db4f6949419182

You should start ripping people off then. Much more lucrative.

Tjaden Froyda @ 9 months ago

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B35527b232c45def78db4f6949419182

Docs advise you on your health. FPs advise you on your investments. You hire both because of information asymmetry. it's not unreasonable to expect they don't rip you off with their advice to enrich themselves.

Tjaden Froyda @ 9 months ago

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0eda15e8a4a685a0722949782c90e863

haha, don't be so dramatic

AMi @ 9 months ago

Naperville, IL, USA

B35527b232c45def78db4f6949419182

It's not really dramatic when that's what has been happening. That's the whole reason for the FP rule in the first place.

Tjaden Froyda @ 9 months ago

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0eda15e8a4a685a0722949782c90e863

On what scale? What percentage of financial advisors refused to show their fee schedule? what percentage knowingly invested their client's money into excessive risk?

AMi @ 9 months ago

Naperville, IL, USA

0eda15e8a4a685a0722949782c90e863

BTW, the Vanguard 500 is an excellent investment base so no argument there

AMi @ 9 months ago

Naperville, IL, USA

5f13389fd6ea4b6de49bacec84ed7d8f

Well we agree on one thing. An index fund is a good thing.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

Now let's talk about management fees of mutual funds. These are hidden for the most part. If your FP puts you into a B class share of a given fund you eill see no commision, and no fees will be shown on your statement. You could be paying up to 4% of

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

your investment until the shares revert to A class shares. Usually about five years. But before that happens, he will find another great fund. You are convinced to transfer into that fund at no cost to you. All the while he is receiving a chunk of

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

the funds management fee.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

This is unfortunately the sop for most FPs. There are no funds worth those kinds of fees. It's a sham meant to take advantage of the ill informed.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

0eda15e8a4a685a0722949782c90e863

How many do this? 50%. 25% .05%?

AMi @ 9 months ago

Naperville, IL, USA

5f13389fd6ea4b6de49bacec84ed7d8f

Over 50% of run of the mill FPs. It's a pretty standard practice. Edward Jones is good example. Basically a fast food franchise for retired teachers who use that background to become financial advisors.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

The background involves having a list of previous students to prey upon.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

0eda15e8a4a685a0722949782c90e863

How did you save yourself from such a fate?

AMi @ 9 months ago

Naperville, IL, USA

5f13389fd6ea4b6de49bacec84ed7d8f

Which fate? Evolving into an unscrupulous financial advisor? I lacked a list of potential victims. And I hate cheap suits.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

0eda15e8a4a685a0722949782c90e863

No being scammed by one I assume your unscrupulous behaviors come in much more creative forms

AMi @ 9 months ago

Naperville, IL, USA

5f13389fd6ea4b6de49bacec84ed7d8f

I learned the hard way. Many years ago. Then a friend of mine explained a few rules of investing. The first being that bankers and brokers are the biggest hustlers you'll ever meet.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

5f13389fd6ea4b6de49bacec84ed7d8f

He then went on to warn about insurance salesmen. I found that amusing because that was his profession.

jc @ 9 months ago

Yellow Springs, OH 45387, USA

0eda15e8a4a685a0722949782c90e863

Whole life insurance is typically pretty rough Northwestern is tolerable as a percentage of a personal investment portfolio

AMi @ 9 months ago

Elmhurst, IL 60126, USA

0eda15e8a4a685a0722949782c90e863

I was hoping Pink would tag in to help me but he's busy playing with his rat

AMi @ 9 months ago

Elmhurst, IL, USA

0eda15e8a4a685a0722949782c90e863

Never will the word huckster be used as liberally again

AMi @ 9 months ago

Villa Park, IL, USA

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