US President Donald J. Trump, before he became president, talked about putting hardworking Americans first and corporate behemoths second. His campaign trail repeatedly promised would-be voters that he will look after their interests.
However, after he got what he wanted- being the President of the United States- he has broken multiple promises, and now about to break one more. In February, 2017, he initiated a process that will stymie a common sense rule which stops financial advisers from cheating their clients. This is a grave issue as intentional bad advice cheats investors of approximately $17 billion every year. As per the new rule, this money will stay with the client. This is known as “fiduciary rule”. The rule requires that financial advisors must act in the best interest of their customers. They are barred to act in their own financial favor or to add up to the profits of the investment firm where they work in. It makes sure that financial advisers follow a premium standard of care when it comes to protecting Americans' financial health in the longer term.
Prior to this rule being made, financial advisers routinely recommended products that would go against the interest of their clients, but would generate prizes, bonuses and commissions.
The new fiduciary rule makes sure that ordinary Americans sleep well knowing that the financial adviser hired by them is working for their interests. Financial advisers cannot line their own pockets. It also helps those honest financial advisors who work for their clients to make a level playing field with their less ethical counterparts. The latter ones will be forced to take decisions by which their clients could enjoy a secure retired life.
The fiduciary rule was supposed to take effect from April 10. President Trump has stopped it. He has delayed the implementation of this rule for a period of 60 days- and there is a chance that he could kill this rule. It is clear that the Trump administration has favored industry and special interest groups over the interest of hardworking Americans. The administration clearly loves corporate behemoths and not retirees.
It may seem that a delay of 60 days is not much. Economists of Economic Policy Institute, a delay of two months will result in a siphoning off of about $3.7 billion dollars. If this continues, the losses of the hardworking American will tot up to $17 billion every year.