Trump’s rollback of the fiduciary rule: Baby Boomers are better off poor. And dead.

what-goldmans-coo-gary-cohn-is-doing-about-our-unfair-world

Gary Cohn. The chief economic advisor to President Donald Trump and Director of the United States National Economic Council. He was formerly the president and chief operating officer of Goldman Sachs.

We Baby Boomers came of age in the sixties and caused hell for the country’s war-makers and segregationists.

And they have been trying to pay us back ever since.

Now that many of us are retiring or retired, they see their chance.

Trump’s signature on the role-back of regulatory rules safe-guarding our retirement savings is an example.

The regs are part of what is called the Fiduciary Rule. Obama expanded it to cover more more of those on Wall Street who are investing retirement savings.

Although as in most government regulations there are a lot of pages addressing the Fiduciary Rule, it comes down to this:

If somebody is investing your retirement savings, they have to do it in your best interest. Not theirs.

Advisors who wish to continue working on commission will need to provide clients with a disclosure agreement, called a Best Interest Contract Exemption (BICE), in circumstances where a conflict of interest could exist (such as, the advisor receiving a higher commission or special bonus for selling a certain product). This is to guarantee that the advisor is working unconditionally in the best interest of the client. All compensation that is paid to the fiduciary must be clearly spelled out as well.
Covered retirement plans include:

As soon as Trump took the oath of office in front of that tiny crowd in DC, he appointed Gary Cohn of Goldman Sachs to be head of his National Economic Council.

Maybe Trump knew he did that. Maybe he didn’t. Maybe somebody slipped a piece of paper among other pieces of papers for him to sign and he didn’t know he was appointing Cohn.

Apparently that’s how Steve Bannon got to be on the National Security Council.

“Mr. Bannon remains the president’s dominant adviser, despite Mr. Trump’s anger that he was not fully briefed on details of the executive order he signed giving his chief strategist a seat on the National Security Council, a greater source of frustration to the president than the fallout from the travel ban.”

But, I digress.

The first thing Gary Cohn did was compose one of those Executive Orders Trump loves to use his Sharpie to sign, rolling back the Obama Fiduciary Rule protecting retirement savings of Baby Boomers and older.

“We think it is a bad rule. It is a bad rule for consumers,” said White House National Economic Council Director Gary Cohn in an interview with The Wall Street Journal on Thursday. “This is like putting only healthy food on the menu, because unhealthy food tastes good but you still shouldn’t eat it because you might die younger.”

Yep. It’s just like that.

11 thoughts on “Trump’s rollback of the fiduciary rule: Baby Boomers are better off poor. And dead.

  1. Help me here. How does the President have the power to void a segment of a law passed by Congress and signed in to law by previous President? Wouldn’t that power only belong to the courts or Congress in a new law?

    • Paul,
      The Fiduciary Rule is not statutory. It is regulatory, issued by the Department of Labor. So it falls under the domain of the executive branch.

      • Thanks but how about the banking regulations? The President claimed he was making it easier for businesses to get loans (read that risky loans). Wasn’t that in a law passed after the Bush crash? Maybe I need to do some more research.

  2. I suspect that most who support the clown do not know the word fiduciary so Delores is right. These non-thinking voters may have savings and some money in savings but have no clue about the fiduciary rule. Shocking in this country that the clown was allowed to do this. Not shocking that he did it. Mindless idiocy are the guidelines for the next few years. Hopefully not 4 years. Hoping for impeachment soon. And prison for Bannon.

    • “Mr. Priebus bristles at the perception that he occupies a diminished perch in the West Wing pecking order compared with previous chiefs. But for the moment, Mr. Bannon remains the president’s dominant adviser, despite Mr. Trump’s anger that he was not fully briefed on details of the executive order he signed giving his chief strategist a seat on the National Security Council, a greater source of frustration to the president than the fallout from the travel ban.”

  3. Fred, just so there’s no ambiguity, the Trustees, staff, and investment managers of the TRS and their exclusive fiduciary duty to the membership of the Retirement System are completely unaffected by the rollback of this rule. Their fiduciary duties arise out of State law and secondarily, the IRS code. The State Board of Investment, its staff and investment managers have a similar role for State Employees, and so on.
    With 403(b) providers, at this moment, there is a great deal of uncertainty as to their fiduciary status.
    This is instructive for those at, as you like to call it and I like to laugh when you do so, the “right wing stink tank” that wants to shove us all into 401(k)s to “save money.” Rich Miller had a post up yesterday on this latter topic with a couple good analyses from outside pension experts (who I know to be credible) that shot this idea chock full of holes.

    • How is there “uncertainty” about 403(b) providers whose product is for public employees, including teachers? The rollback of the fiduciary rule does apply to those investment hucksters and does impact teacher retirement savings.

  4. Pingback: The Fiduciary Rule, TRS and Baby Boomer retirement savings. | Fred Klonsky

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s