5 predictions for advisors in Biden's first year

5. A likely increase in the corporate business tax rate, which is "the biggest effect a Democrat-controlled Congress would have on investments," writes Szapiro, adding that the narrow Democratic majority in the Senate means "a lot of public policy making will be left up to executive action." Biden proposed an increase in the corporate tax rate from 21% to 28% during his presidential campaign, as well as an increase in top marginal tax rate to individuals from 37% to 39.6%. His nominee for Treasury Secretary, Janet Yellen, said she would work with legislators to fast-track some tax increases on corporations and wealthy Americans, according to a 114-page document obtained by Bloomberg News.

(Photo: Shutterstock)

1. Increased enforcement of the SEC's Regulation Best Interest Rule, which requires firms, advisors and other financial professionals to act in the best interest of retail clients when recommending transactions or investment strategies involving securities. Szapiro expects that the Biden Administration will push for more robust policies and procedures on enforcement of the rule, including how fiduciaries can mitigate conflicts of interest and arrive at recommendations that are in clients' best interest. Recommending rollover individual retirement accounts, for example, could get extra scrutiny, according to Szapiro.

(Photo: Shutterstock)

2. Delay of the DOL's fiduciary rule, which was designed to harmonize with the SEC's Reg BI but which is not slated to take effect until Feb. 16. On the first day of the Biden Administration Ron Klain, the president's chief of staff, issued a regulatory freeze that directs agencies to consider postponing the effective dates for new rules for 60 days from Jan. 20 for rules that have not yet taken effect. During that time, agencies could also reopen a public comment period for 30 days to interested parties. Szapiro also expects Biden's team to expand on the rule, which subjects advisors to a fiduciary standard when making IRA rollover recommendations, and to possibly require more documentation from advisors about how a rollover would be in their best interest.

(Photo: Shutterstock)

3. Substantial modification of the DOL's ESG rule, which essentially limits the availability of investments focused on environmental, social and governance factors in defined contribution retirement plans. Although the rule took effect in mid-January, it is included among the myriad list of rules included in a Biden executive order for agency heads to review because of their impact on public health, the environment and the climate crisis.

(Photo: Shutterstock)

4. A tougher Consumer Financial Protection Bureau, which is tasked with protecting consumers from unfair, deceptive or abusive practices and take action against the companies that use them. Biden has nominated consumer advocate Rohit Chopra, who worked on the CFPB's creation and served as its first student loan ombudsman, uncovering abuses by Navient, the largest student loan servicer, and other firms. Chopra went on to serve at the Department of Education and then at the Federal Trade Commission; he is expected to reinvigorate the agency, which saw its role limited during the Trump Administration.

(Photo: Shutterstock)

5. A likely increase in the corporate business tax rate, which is "the biggest effect a Democrat-controlled Congress would have on investments," writes Szapiro, adding that the narrow Democratic majority in the Senate means "a lot of public policy making will be left up to executive action." Biden proposed an increase in the corporate tax rate from 21% to 28% during his presidential campaign, as well as an increase in top marginal tax rate to individuals from 37% to 39.6%. His nominee for Treasury Secretary, Janet Yellen, said she would work with legislators to fast-track some tax increases on corporations and wealthy Americans, according to a 114-page document obtained by Bloomberg News.

(Photo: Shutterstock)

1. Increased enforcement of the SEC's Regulation Best Interest Rule, which requires firms, advisors and other financial professionals to act in the best interest of retail clients when recommending transactions or investment strategies involving securities. Szapiro expects that the Biden Administration will push for more robust policies and procedures on enforcement of the rule, including how fiduciaries can mitigate conflicts of interest and arrive at recommendations that are in clients' best interest. Recommending rollover individual retirement accounts, for example, could get extra scrutiny, according to Szapiro.

(Photo: Shutterstock)

2. Delay of the DOL's fiduciary rule, which was designed to harmonize with the SEC's Reg BI but which is not slated to take effect until Feb. 16. On the first day of the Biden Administration Ron Klain, the president's chief of staff, issued a regulatory freeze that directs agencies to consider postponing the effective dates for new rules for 60 days from Jan. 20 for rules that have not yet taken effect. During that time, agencies could also reopen a public comment period for 30 days to interested parties. Szapiro also expects Biden's team to expand on the rule, which subjects advisors to a fiduciary standard when making IRA rollover recommendations, and to possibly require more documentation from advisors about how a rollover would be in their best interest.

(Photo: Shutterstock)

3. Substantial modification of the DOL's ESG rule, which essentially limits the availability of investments focused on environmental, social and governance factors in defined contribution retirement plans. Although the rule took effect in mid-January, it is included among the myriad list of rules included in a Biden executive order for agency heads to review because of their impact on public health, the environment and the climate crisis.

(Photo: Shutterstock)

4. A tougher Consumer Financial Protection Bureau, which is tasked with protecting consumers from unfair, deceptive or abusive practices and take action against the companies that use them. Biden has nominated consumer advocate Rohit Chopra, who worked on the CFPB's creation and served as its first student loan ombudsman, uncovering abuses by Navient, the largest student loan servicer, and other firms. Chopra went on to serve at the Department of Education and then at the Federal Trade Commission; he is expected to reinvigorate the agency, which saw its role limited during the Trump Administration.

(Photo: Shutterstock)

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5 predictions for advisors in Biden's first year

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Instant Insights /

5 predictions for advisors in Biden's first year

Bernice Napach

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