On a flight to Houston I sat behind two strangers who were engaged in a very active political discussion. The word that came to mind to describe their very animated three-hour debate, was "anger." Americans, from all political views, are angry at government.
As I visited the DMV this week to take care of, what in the business world would have been a simple matter, I was reminded of the disconnect that exists between regular Americans and their government. A business survives by providing a product or service the customer wants or needs, and must do so efficiently, or a competitor will quickly push them aside. Government’s purpose is to control activities, (such as issuing drivers licenses), but in so doing has no competition, thus has no need to provide either efficiency or quality. As a result, its efforts often generate anger among its citizens. Well fellow citizens, and particularly investors, prepare for your level of anger to soon be elevated, as if that is possible.
Six months ago I discussed the Department of Labor's (DOL) proposed fiduciary ruling. That ruling is expected to be announced in the next 60 days. Opposition has been strong from both sides of the political aisle, but the ruling comes from the executive branch and therefore, is bypassing congressional approval. The DOL has been tight-lipped about what is in the final ruling, but it is apparent from the discussions that dramatic changes are about to happen to the way investors, and their advisors, engage in the investment process. The ruling affects all retirement accounts.
Designed to "protect" investors from perceived evils, the DOL is set to place restrictions on where retirement assets may be invested. In addition, the private relationship between an investor and their advisor will be governed by strict new rules and involve significantly more regulations. I am personally not looking forward to having to tell my clients,
“Yes, I know that IRA is your money, but you can no longer invest it as you choose.” It is my personal belief that the added regulations and costs will force many advisors to drop their smaller clients, those who often need advice the most.
As an example, this week MetLife joined the growing list of financial firms who announced they are getting out of the investing advice business because the DOL ruling will make the cost of providing advice prohibitive. Companies like MetLife have always served large numbers of newer and smaller investors.
As this ruling begins to be implemented and millions of unsuspecting American savers feel the effects of a government that believes your IRA is their IRA, I suspect the anger will rise to yet another level. Is it any wonder the political debates have been looking like a backyard brawl? Don't blame the candidates. They are merely reflecting the anger most Americans are feeling. As to what investors can do at this point, once the official ruling is released I will share some thoughts I have on how to make the best of it.
**The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
Member www.finra.org / www.sipc.org , a Registered Investment Advisor. Wyson Financial, 1173 S. 250 W. Suite 505, St. George, UT 84770.
This communication is strictly intended for individuals residing in the states of AZ,CA,CO,DC,FL,HI,ID,IL,KS,KY,MA,MI,MN,MO,MT,NE,NM,NV,OH,OR,SD,TX,UT,VA,WA,WY. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services.