What a difference a presidential election makes. I recently had a chance to quiz several different well-regarded financial writers about what 2016 events they felt produced the most significant course alterations within the retirement plan industry (see “These Five Developments Dramatically Changed the Retirement Fiduciary World in 2016,” FiduciaryNews.com, December 13, 2016). These folks aren’t just bloggers, they live and breathe each day as professionals within the industry. That gives them a perspective not often found in the reporting of full-time journalists.
In fact it was a stimulating discussion, filled with phrases like “fiduciary rule,” “State-run retirement plans,” and “Excessive fee litigation.” We explored many iterations and scenarios. We conjured up a cornucopia of scenarios. In many ways, we expressed the thoughts of many others who reflected on this very same subject. It was all fun and games,… until we came face to face with the 800-pound gorilla in the room.
The early morning hours of Wednesday, November 9th finally confirmed what the previous evening made surprisingly clear: Donald J. Trump was elected as the 45th President of the United States of America. It’s become a cliché to say the winner of the presidential election – any presidential election – stands out as the most influential person of that year. In the case of President-rlect Trump, this represents no banal platitude, but a dramatic understatement.
Overnight, we went from extrapolating the immediate past into the immediate future to wondering what this new world of the future will look like. At first it seemed merely a “will he really do it?” Will Trump really repeal Obamacare? Will Trump really rescind the fiduciary rule? Will Trump really halt the movement towards state-run retirement plans in its tracks? The fact Trump had only spoke out against the first item on this list meant less certainty as to what will happen next.
You could understand, despite our realization the election changed everything, if we remained a bit skeptical. After all, repealing Obamacare represents no small hurdle. And this is just in the benefits arena. Trump had a whole list of “to-do’s” ranging from the economy, to immigration, to foreign relations. As confident as he was in himself, we mild-mannered humans projected our own frailties onto this overachiever.
That, in retrospect, sticks out as yet another in a long line of misguidance “common” sense when it comes to Trump. Just days after election, we saw Apple say they’d consider building iPhones in America, Ford promise not to move its plant to Mexico, and Carrier actually reverse its decision to move nearly 1,000 jobs from Indiana to Mexico.
Suddenly, all the bluster of the campaign transformed from the usual “election promises” to actual reality. Trump’s approval rating shot up from the mid-30’s to 50% or more. All this while the previously stagnant markets have soared to record highs and consumer confidence has climbed.
I have this strange feeling it’s morning in America again.
Unless, of course, you liked the direction things were going at the DOL.
Well, thanks to the election, that particular calculus can be thrown right out the window.
In another tell-tale sign of the coming changes, Thomas Donohue, President and CEO of the U.S. Chamber of Commerce, says on his blog “The Chamber is already working with transition officials to identify priority areas where relief is most urgently needed. For example, we are urging immediate action to undo the Department of Labor’s Fiduciary Rule.”
At the same time, Wisconsin Senator Ron Johnson wrote a letter to Secretary of Labor Tom Perez on November 22, 2016 in which he said “I hope the Labor Department will acknowledge the reality of the situation and avoid imposing unnecessary costs and burdens in further implementation of a regulation that will very likely be rescinded.”
Add to this recent testimony from David Blass, general counsel for the Investment Company Institute, to the SEC Investor Advisory Committee stating the DOL’s rule “is going to be harmful to investors.”
There’s nothing that says you can’t disagree with these high profile opponents of the fiduciary rule, but, face it, you’d have just as much success spitting into the wind.
The presidential election changed everything.