Consumers want it
Brian Dunhill of Belgium-based IFA firm Cross Border Planning, used to work as an adviser for US investment bank UBS.
He believes it’s “highly unlikely” the fiduciary rule will be repealed as the advice industry has already spent millions of dollars in preparation.
Merrill Lynch and JPMorgan Chase have made the decision to stop offering commission-based retirement accounts ahead of the reforms, while Morgan Stanley confirmed last month it will keep the accounts.
He added that the standards have been driven by clients wanting more transparency around charging rather than government regulation.
“While there has been lots of talk about the rollback of the fiduciary rule by the DOL, unlike Europe the move towards fiduciary standards has been led by the consumers and advisors not by the government.
“Therefore, it is highly unlikely that even if reversed it would change the movement. Most firms have already made changes to their retirement vehicles.” he told IA.
Industry shares rally
Meanwhile, shares in financial companies have risen sharply since the election, spurred on in part because traders have placed bets that the rules will be repealed.
Bank of America, which owns adviser brokerage Merrill Lynch, was up 5.7% on Wednesday, while other such as Morgan Stanley rose 7.1%. Wells Fargo, with its Wells Fargo adviser unit, was up 5.4%.
Brennan Hawken, a Wall Street analyst at UBS, described Trump’s historic win as a “game changer” for the fiduciary rule, adding that it is now likely to be scrapped or at least curbed so it is “less disruptive to business models, with less legal liability”.
