ldsfaqs wrote:http://www.forbes.com/sites/johnberlau/2016/03/04/how-fiduciary-rule-may-censor-financial-broadcasters-like-dave-ramsey/#27bf5e19e696
Here we have liberals trying to silence experts, and cause only the rich to be serviced in investing.
That blog entry is extremely one-sided.
The fiduciary rule simply says that financial advisors must act in the best interest of their clients. As an example, if you call up a stock broker and ask for investment advice, he might tell you, "you really need to purchase stock in ACME corp! I got some inside-information that that stock is going through the roof!" BUT, it's possible that the real reason he is pushing that stock isn't because he thinks it is a good investment, but rather somebody else is giving him a kickback for selling that particular stock.
Under the new rule, people who give investment advice will have to give advice based upon what's in the best interest of the clients, rather than based on who will give them the biggest commission or pushback for selling a specific investment.
It's true that some people make their living off of commissions from the specific investment advice they make, and it's also true that others might not want to give advice at all in the new framework because of the added pressure of being legally required to only give advice that's in the best interests of the clients.
But do you REALLY think that the Obama administration sat down one day and had a meeting that went like this?
Obama: What fascist laws can we pass in order to finish the destruction of the middle class?
Advisor: I have an idea; let's make it impossible for the middle class to get financial advice?
Obama: How will that work?
Advisor: We'll create a new fiduciary rule that says you can only give advice if the advice is in the best interest of the clients.
Obama: That is brilliant! One of the bedrocks of the middle class is investment advice that's given in the best interest of the advisor rather than the best interest of the client. If we make advisors start looking after their clients' best interests, they will only give advice to the rich!
Advisor: Exactly! And the middle class will be doomed!
Obama: Today, I'm calling on the Department of Labor to update the rules and requirements that retirement advisors put the best interests of their clients above their own financial interests. It's a very simple principle: You want to give financial advice, you've got to put your client's interests first. [Snicker: That will destroy the middle class for sure!]