Today’s “Slap in the Face” Award really hurts.

This cheek smacker goes out to President Trump for asking the Department of Labor to potentially roll back its new retirement-focused fiduciary rule that was to go into effect this April.

In case you missed it, last spring, the fiduciary rule, which had always applied to those with a trust officer managing their money – usually really big clients – was finally extended to apply to all retirement accounts.

[ad#Google Adsense 336×280-IA]It essentially called for any financial advisor who manages retirement accounts to put the client’s best interest first – in all decisions.

The best example of this rule?

If an advisor wants to recommend a fund or an ETF for a client’s retirement account and has several choices that all do the same thing (which is almost always the case)… under the fiduciary rule, he must choose the one with the lowest cost.

The current “suitability” rule states that a broker or advisor only has to recommend an investment that’s suitable for his client.

But the sky’s the limit for the costs associated with those investments.

In several segments here at the “Slap,” I questioned why this fiduciary rule didn’t apply to all investments, rather than just retirement accounts.

It seems rather obvious that an advisor should always act in his client’s best interest.

Either I’m missing something or the president is getting really bad advice. Rolling this back is wrong.

Investment costs have eaten as much as one-third of long-term returns.

It’s tough enough to fund a retirement that’ll run well into your 80s without having to give a third to Wall Street.

I am “all for” financial deregulation that benefits both businesses and the taxpayers, but this one does not meet the standard of improving our lot. This is wrong.

Giving Wall Street the freedom to sell overpriced products when lower-cost ones do the same thing is an outrage! And it never should have been allowed.

The current language in the president’s directive tells the Department of Labor to “prepare an updated economic and legal analysis” to consider if the rule “has harmed or is likely to harm investors… has resulted in industry disruption that may adversely affect investors or retirees…” or whether the rule is “likely to result in an increase in litigation and an increase in the prices that investors and retirees must pay.”

Wall Street was anything but his ally in the election, so the decision could still go in our favor.

However, it looks like it’s time to write a letter to “The Donald”… to set him straight on whose interest should be respected in the client vs. investment advisor relationship.

The full memorandum is hyperlinked above for your reference. Take a look, get out your pen and paper, and write him a letter. Or write him an email.

This is wrong, folks and we’ve got to stop it.

Good investing,

Steve

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Source: Wealthy Retirement