2016. It was the best of years, it was the worst of years. The annum began with all the excitement of the day before Christmas, with the unopened promise of a neatly wrapped fiduciary rule soon to be delivered under the investment advice tree by the jolly DOL elf.
It’s now nearly twelve months later, and all that excitement has withered with the knowledge that same fiduciary rule will soon be left abandoned like so many toys in the days following Christmas.
The road to fhe fiduciary rule has been long but ever ascendant, but now many are left wondering “What’s Next?” (see “‘Houston, the Fiduciary Has Landed.’ Where Does ‘Fiduciary’ Go From Here?” FiduciaryNews.com, December 6, 2016). Some cling to the vague hope this is all but a dream, and when the new morning dawns, the world will return to the normal we all once embraced.
But a new morning has dawned. It brings with it many things, many good and exciting things. At least that’s what everyone is saying. Now. One of the things it doesn’t bring with it – and that’s The Fiduciary Rule.
I know, I know, you’ve read ad infinitum so many articles detailing why the fiduciary rule is too big to kill.
By now, the never-ending list is probably etched in your brain: “It’s not a priority for Trump;” “Senate Democrats will block any legislation designed to end it;” “80 days between Inauguration and Implementation is too short a time to do anything;” “It can’t be rescinded in time;” “A new Labor Secretary and Under Secretary won’t be approved in time;” et cetera, et cetera…
These are all the last gasps of denial.
If there’s one thing we should have learned in 2016, it’s that you should never tell anyone anything is impossible, especially if that anyone is one President-elect Donald J. Trump.
Time and time again, when they said it couldn’t be done, Trump found a way to do it.
I continue to believe shutting down the fiduciary rule is low on Trump’s “To-Do” list, but it will just as quickly be “the player to be named” later during the inevitable negotiations that he will engage in with the Republican leaders on Capitol Hill.
For those in Congress, ending the fiduciary rule is a high priority, perhaps higher than some of Trump’s priorities. No one should be surprised if the fiduciary rule ends ignobly on page 743 of the 23,748 page law that rescinds Obamacare.
If you’re looking for a slim thread of hope that the fiduciary rule sticks around a little longer, here it is: Trump has made clear his dislike for big banks and hedge funds.
Perhaps this personal vitriol extends to other “big” financial firms, like the brokers who see the fiduciary rule as an albatross on their heretofore extremely profitable business model.
If this is the case, then maybe Trump doesn’t want to move too quickly – if at all – on the fiduciary rule. Maybe, just maybe, he’s thinking it might be fun to leave them dangling there for a bit while longer.
There are any number of ways to achieve this and, at the same time, effectively kill the fiduciary rule.
For example, Trump could simply ignore the rule. He could agree with Congress to withhold the funding necessary to implement the rule. That way, the rule could stay swinging on the books with Damocles dormancy.
Firms would continue to have to expend the necessary funds to prepare for its theoretical implementation while swarms of tort attorney swim around them in circles, waiting to “enforce” the phantom fule.
It’s a fuzzy limbo that could only be found in The Twilight Zone.
If there’s one person who knows how to turn classic TV into a reality show, it’s Trump. Don’t bet against him.