04-07-2016, 10:32 AM
DW has it right. Nobody is proposing imposing additional fees on customers that buy their own shares. This is primarily about managed money, which most DGers shun like the plague. And the rest of it is largely the "doom and gloom" that the financial players used in fighting the new standards.
Money managers are likely to make somewhat less obscene profits as a result of these changes. Rather than get huge commissions for selling promoted products (under the current "suitability" standard), they'll have to take a fee based on assets under management (while honoring the fiduciary standard). Because they didn't want this cash cow to be killed, they fought these new rules vigorously. In fighting the new standard, they made all sorts of stupid arguments trying to scare the administration out of its position. Among those arguments were "we'll have to dump small investors" and "we'll have to impose higher fees" etc. etc. It is mostly nonsense. And I'm hardly surprised that the WSJ emphasized those positions.
My sense is that these new standards are overdue and good for just about everyone except the folks who were making ridiculous commissions selling inappropriate investments to their "clients."
Money managers are likely to make somewhat less obscene profits as a result of these changes. Rather than get huge commissions for selling promoted products (under the current "suitability" standard), they'll have to take a fee based on assets under management (while honoring the fiduciary standard). Because they didn't want this cash cow to be killed, they fought these new rules vigorously. In fighting the new standard, they made all sorts of stupid arguments trying to scare the administration out of its position. Among those arguments were "we'll have to dump small investors" and "we'll have to impose higher fees" etc. etc. It is mostly nonsense. And I'm hardly surprised that the WSJ emphasized those positions.
My sense is that these new standards are overdue and good for just about everyone except the folks who were making ridiculous commissions selling inappropriate investments to their "clients."