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Stockbrokers Win, Americans Lose

03/17/2018

Historically, stockbrokers have been mere salesmen, pushing high commission or hidden commission products onto their unsuspecting clients.  Out of that swamp, Registered Investment Advisors emerged.  They embraced the Fiduciary Standard, which requires no hidden fees and full disclosure of any conflicts of interest.  Stockbrokers were held to a mere “suitability standard” which is virtually no standard at all.

Congress instructed the Securities and Exchange Commission (SEC) to develop a Fiduciary Standard for all investment advisors.  After a massive, years-long lobbying effort by stockbrokers, the SEC booted the project over to the Department of Labor, who finally produced such a standard, for application only to retirement accounts, mostly IRAs.

Then, along came the Trump Administration, who postponed implementation.  Now, the Fifth Circuit Court of Appeals has struck down the Fiduciary Standard.  Only the Supreme Court can save the Standard now.  Stockbrokers/salesmen are celebrating nationwide.

They are celebrating because their clients will not know the true cost of their accounts and because they can push products in their best interest, instead of their clients’ best interest.  They still don’t have to tell their clients about any conflicts of interest.

Sorry, America — you lost!  You’re sinking back into the swamp . . . 

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