Republicans are planning to undo an Obama rule regulating the business models of brokers and financial advisers. The Obama rule is called the “fiduciary rule.”
Sen. Elizabeth Warren, the champion of this rule and thus fierce opponent of the GOP effort to undo it, made sure last week to point out that she has a strong ally in this fight: The largest financial adviser firms.
Twenty-one of the largest financial firms wrote to Warren last month. “Their overall message was clear” Warren wrote: “this rule is good for workers saving for retirement and companies are prepared to meet the compliance deadline.”
Here’s more from Warren’s message:
Industry leading firms including Vanguard, TIAA, and Transamerica expressed their support for the rule, and BlackRock emphasized that “We need immediate action, as the longer we wait the deeper and more difficult” the retirement crisis “problem becomes.” In addition to general support, companies such as Charles Schwab, Capital One, and Lincoln Financial stated that they have spent time and resources investing in compliance with the new rule and fully expect to be ready to serve their customers under the rule’s higher standard by April 10, 2017.
As Capital One wrote: “Capital One’s investment business has been on a multi-year journey to reduce the number of commission-based products we sell to advised retirement clients because it aligns with our vision of serving clients by putting their interests first,” adding, “It provides the added benefit of lowering costs for our clients.”
The letter concluded: “the overwhelming voice of financial firms is clear: they support the goals of this rule; they have invested in this rule; they have planned for this rule; and they will be ready by the April deadline.”
This is nothing unusual. The largest firms in any field are always most able to shoulder the costs of regulation. That’s why Philip Morris supported Obama’s regulation of tobacco, Mattel supported Obama’s regulation of toys, Monsanto supported regulation of genetically modified foods, Costco and Walmart have supported hikes in minimum wage and mandates that employers provide health insurance.
Smaller competitors can’t always adapt, which makes big government a big winner for big business. And Warren knows that.
Timothy P. Carney, the Washington Examiner’s commentary editor, can be contacted at [email protected]. His column appears Tuesday nights on washingtonexaminer.com.
