Last month, the DoL announced a 60-day delay to the fiduciary rule following pressure from president Donald Trump, who urged the department to examine the regulation and prepare an economic and legal analysis on the impact of the rule.
Katz and her spouse, who are currently working with industry body the Fiduciary Committee to help companies comply with the rule, believe the delay will be temporary and is just “grandstanding” by the president.
Keeping a close eye on regulation in the rest of the world, Katz has always been an advocate of transparency and a fee-based approach, calling it a “no brainer”.
“The idea that people had to declare they sell products or they are an adviser is to me a no-brainer,” she says of the UK’s RDR model.
She admits the US is “behind the curve” when it comes to consumer protection, putting this down to a culture that favours light-touch regulation, often backed by cash-rich lobbyists from the asset management sector.
“We have very big lobbyists in Washington, who throw a tonne of money at preventing us from getting our act together. It’s almost embarrassing, since we were the first to start the concept of financial planning.
Future planning
“Everybody should be working in their clients’ interests but in this country if you work for a broker dealer or an insurance company, you are considered an agent of that company. That is a real conflict,” she says.
Looking ahead, Katz is adamant that over the coming years the financial advice industry will “change immeasurably”, expecting the downward pressure on fees and commissions to continue.
She also predicts the emergence of digital advisers should be seen as an opportunity rather than a threat, as it will encourage millennials to seek out financial planners when their lives become more complicated.
At the moment, Katz has no plans to retire. “I’ve done everything I’ve wanted to do. I’m older than I ever intended to be but I feel young so I’m going to hang out and teach.”
But she concedes: “Getting a lifetime achievement award is a really signal that you ought to start thinking about retirement.”
