Quote:
Originally Posted by StefanG
yeah, it would be costly to act solely for the benefit of their clients. right.
but hey, at least America will be great again
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you obviously don't understand what financial advisor is, what they do, how they bill, etc...
Obama meant well, but the whole premise of this law is missing the point... financial advisor is a skilled profession on par to accounting or law, so even moderately skilled financial advisors bill $100+/hr...
that means that 90% of people can not afford services of such a professional, especially considering that managing someone's finances properly to the new "fiduciary" standard is a non-trivial task, requiring numerous hours of work per year per client...
up to now, it all kinda worked, client had a few bucks to invest, advisor told him to put the $$ in some fund... he collected 0.2% or whatever commission on it each year, so he made some relatively easy $$, client usually got a reasonable return on his investment too, and everyone was happy...
now financial advisor can't tell the client to do the same anymore, cause now financial advisor bears pretty much fully responsibility for anything that could wrong... so if market goes down for example, it's now advisor's ass on the line, he needs to be able to justify that the fund was the best for the client, he needs to be able to prove that he properly advised the client about risks/diversification/etc, he needs to prove that he properly managed the client's portfolio, etc... and even with all that, some sleazy lawyer will always find some bullshit reason why it's financial advisor's fault that investment didn't work out...
so obviously that would cause the prices of financial advisory services to rise, something that was barely accessible to most people anyway...