The Trump administration is siding with Wall Street rather than moving quickly to protect mom-and-pop investors from unscrupulous financial advisers. The good news is states aren’t waiting for Washington to act. They’re stepping in to protect small investors all on their own.
Donald Trump campaigned as the champion of working Americans, but as president he has consistently sided with big business. That became especially clear when his administration decided to push back the deadline for retirement investment advisers to fully comply with an Obama-era rule requiring them to act in their client’s best interests.
The rule is meant to prevent retirement investment advisers from telling their clients to plow their retirement savings into investments that make lots of money for the advisers, but not so much for the clients. Until now, such practices have been legal though they represent a conflict of interest.
President Barack Obama strongly advocated for and finalized what’s known as the fiduciary rule. It required retirement investment advisers to put the best interests of their clients first so more money stays in investors’ pockets.
Wall Street objected. The Trump administration put up resistance. As the New York Times put it:
“In one of his first acts in office, President Trump effectively delayed the rule’s implementation date, April 10, by issuing a memorandum that called for its review and possible rollback. The Labor Department, which has jurisdiction over the issue, could find no legal way to alter or rescind the rule, so it took effect on June 9, with one catch: The department said it would not enforce the rule until Jan. 1, 2018, ostensibly to give financial firms time to adapt.”
Though significant portions of the rule wouldn’t have taken effect for another two years, the Trump administration did its corporate buddies another solid and delayed it even longer, until July 1, 2019.
We’re heartened to learn, however, that several states, including Nevada, Connecticut and others like New York and California, have either imposed their own strict fiduciary laws or plan to do so soon. It’s the right thing to do.