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New Financial Reform Law


On the premise that it might be easier and more persuasive for someone outside the profession to respond, off the top of my head I can rattle off at least three people who post regularly here (joetaxpayer, Skip, and Tad) and who are in the profession who strike me as honest. Once in awhile one or another of us may disagree a bit on the details now and then, but mostly I think the financial planners here are straight talkers.
To Skip's question, an article dated July 15:
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Reply to
Elle

In article ,
At some point there will be an official definition (probably 100s of pages) of what it means to be a Fiduciary and then there will be paperwork (some kept, some filed) which will have to be kept to prove that you are a fiduciary.
Reply to
Avrum Lapin

There is a timebomb aspect to it where much of it simply grants agencies with the authority to be very meddling if and when they choose. In the meanwhile they will be swamped with lengthy studies they are mandated to do. Then they have such vast authority (not sure how much over financial planners) such as to set compensation schemes by agency rules, that they probably won't have the audacity to invoke it until the next populist outrage. Maybe some of it is unconstitutional or has other problems, which I heard will be addressed in a technical refinement law (I'm not using the right terms here).
Reply to
dumbstruck

"HW \"Skip\" Weldon" writes:
There was a lot of hot air blown about regarding extending the fiduciary standard (which RIAs and, therefore, financial planners are already subject to).
The Financial Planning Association, of course, wanted brokers, agents, and salespeople (many of whom call themselves, somewhat misleadingly, "financial advisors") to also be held to that standard. Then the screaming and crying from insurance companies and brokerages came and instead of extending the standard to them, there's going to be "study". I translate that as "nothing will come of it".
There are 2000+ pages in the reform package and nobody knows all of what's in there -- especially the folks who voted for it or signed it. I can guarantee you that not a single one of them read or understands the entire thing.
The biggest things are mostly going to affect large banks - the "too big to fail" provisions and the exchanges and regulations for derivatives, for example. This stuff should have little to no impact at the level of the individual or the financial planner.
If anyone else has noticed details which should affect the little guys, I'd love to hear about it - please post!
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Plain Bread alone for e-mail, thanks.  The rest gets trashed.
Reply to
BreadWithSpam

Many of these programs are still outlines. They have to fleshed out with organizations and detailed regulations.
Reply to
rick++

snipped-for-privacy@fractious.net writes:
According to an SEI Advisor Network survey, nearly 75% of advisors are either "somewhat familiar" or "not familiar" with the implications of financial reform. And only 6% said they are "very familiar" with these changes in the industry. Moreover, more than half (56%) of the advisors have not discussed recent reforms with their clients, according to a press release from SEI.
and
"The biggest impact will depend upon the results of the SEC study on fiduciary standard for all financial advisors," said David Strege senior wealth coach of Syverson Strege & Co., in Iowa, in an email response to On Wall Street. "If the SEC [decided] that all financial advisors are fiduciaries in the role of giving advice and that they must work for the best interest of the client, [that] will cause significant changes to be made in many practices."
Since financial planners and RIAs already are (supposed to be) fiduciaries, this shouldn't have any major impact for them, though it's entirely possible that the study will, as someone else mentioned, actually detail more specifically what it means to be one.
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Plain Bread alone for e-mail, thanks.  The rest gets trashed.
Reply to
BreadWithSpam

Here's one that will affect thousands of individual planners/firms: the threshold for registering as an investment adviser with the SEC is rising from the current $25-30 million range to $100 million in assets under management. Below that, you register as an adviser with your home state and possibly other states where you have clients. [If you advise individuals about securities for a fee, and use the term "financial planner", you probably have to register as an investment adviser.]
Most advisers consider SEC regulation to be more stringent than state regulation, especially given that state budgets are strapped. But the SEC is strapped as well and shifting the burden of regulating small advisers to states is one way of having more time for higher-priority enforcement.
For those who like to get involved...as directed by the bill, the SEC is soliciting comments from the public regarding financial regulation in all sorts of areas. It's by far the biggest push I can recall in the last 10 years, during which a lot of proposed regulations have sat gathering dust. Go here:
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-Tad
Reply to
Tad Borek

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