WSJ Wealth Adviser Briefing: For Some Retirement Savers, Fiduciary Delay Doesn’t Matter

Some brokerages are forging ahead with a new retirement-savings rule even though the Trump administration has postponed—and could cancel—its implementation.

The fiduciary rule was set to take effect on Monday, but the Labor Department has officially delayed it for 60 days starting April 7. In that time, the department can revise it, rescind it or request another delay. After the rule was unveiled in April 2016, some brokerages moved clients from commission-based accounts that could run afoul of the rule to fee-only accounts.

Among firms that disclosed their plans after the fiduciary rule was announced, Merrill Lynch— Bank of America Corp.’s wealth-management unit—and J.P. Morgan Chase & Co. say they are still moving most clients to fee-based accounts. A J.P. Morgan spokesman said the bank would push back its deadline to track the Labor Department’s actions. Other brokerages including Morgan Stanleyand Edward Jones have said they would keep some previously announced changes, such as lower commission charges and some sales restrictions.

“Firms have been constantly revising their strategy to keep up with the latest potential options looked at by the Department of Labor,” said Bharat Sawhney, a managing director focused on wealth and investment management at consulting firm Gartland & Mellina Group. “But the damage has already been done.”

Below, some of the best analysis and insight from WSJ writers and columnists, and occasionally beyond, on investing, the wealth-management business and more.

TALKING POINTS
Wall Street banker’s struggle. 
After the apparent suicide of Wall Street banker Charles Murphy, friends say the brilliant, commanding, sometimes abrasive banker suffered from depression—and grew despondent maintaining the charmed life he built for his family.

Goldman profits off credit scores. Goldman Sachs Group Inc. has backed skyscrapers and movie studios. But its big winner lately is a once-sleepy credit bureau. Goldman bought TransUnion, the smallest of the three main credit-reporting firms, in 2012.

By the time it went public three years later, TransUnion had become a data-mining machine, gathering billions of seemingly insignificant tidbits about ordinary Americans that it analyzed and sold to lenders, insurers and others. Goldman has already pocketed nearly $600 million in profit and is poised to make five times its initial $550 million investment.

Friday’s markets. Markets swung on a series of economic data and global events during the week, leaving the Dow Jones Industrial Average seven points below where it closed the previous Friday. The Dow industrials ticked down 6.85 points, or less than 0.1%, to 20656.10 and was also down less than 0.1% on the week. The S&P 500 dropped 1.95 points, or 0.1%, to 2355.54 on Friday and the Nasdaq Composite shed 1.14 points, or less than 0.1%, to 5877.81.

PLANNING AND INVESTING
Apps save the day. 
An app can help you order a pizza, find a parking spot—or plan your retirement. In more than a dozen recent experiments, Duke University behavioral economist Dan Ariely used mobile apps and simple tenets of psychology to help people save more money, pay down more debt and devise and stick to budgets.

Overall, Dr. Ariely’s research at the university’s Common Cents Lab shows that people enrolled in the behavioral interventions spent less and saved more than those who weren’t.

Got fear? Very little seems to spook financial markets these days. That itself is a cause for concern.

Last week alone, a subway blast in Russia killed several people, a truck drove into pedestrians in Stockholm and the U.S. military launched dozens of missiles at a Syrian air base. Those three events normally would at least send some tremors through markets. Instead, stocks barely budged.

First Trust launches an ETF of ETFs. Some of the biggest action in exchange-traded funds last month took place in two little-known First Trust ETFs. The biggest trader? First Trust Advisors LP itself.

The trading was triggered by a rebalancing of the $2.5 billion First Trust Dorsey Wright Focus 5 ETF. The fund tracks a Dorsey, Wright & Associates index that analyzes recent market trends for signs of momentum, buying sectors and industries with the most substantial recent gains. It owns just five ETFs at a time, all picked from the First Trust lineup.

Indexes buck nonvoting rights. No vote, no index. FTSE Russell said it won’t add Snap Inc. or other companies with nonvoting shares to its major stock benchmarks when it updates them in June. The issue of voting rights is raising the ire of some shareholders’ rights advocates because founders and executives often end up with far more votes than shares. That has put index firms in the spotlight.

FTSE Russell issued a statement last week in response to concerns about stocks with no voting rights, such as the Class A shares Snap sold in March. The firm plans to consult with investors and other stakeholders over the next few months about whether to include companies with no voting rights in its indexes.

Watching Your Wealth podcast. Beth Kobliner, author of “Make Your Kid A Money Genius (Even If You’re Not)” discusses how parents can best start a conversation about money with their children, and breaks down the most productive ways to inform them about finances.

Subscribe to the Watching Your Wealth podcast at wsj.com or on iTunes. And find the full archives of Watching Your Wealth here.

BUSINESS AND PRACTICE
Adviser Voices. Brian Gracie, founder of Heritage Financial Consultants in Hunt Valley, Md., says now is a good time for advisers and clients to re-evaluate and adjust their approach to stocks in tandem with their bond strategy.

ADVISER CALENDAR
– ADISA 2017 Spring Conference / New Orleans, April 3-5

– IA Compliance / Washington, D.C., April 5-7
– FPA Retreat 2017 / Braselton, Ga., April 24-27
– Morningstar Investment Conference / Chicago, April 26-28
– NAPFA Spring National Conference / Bellevue, Wash., May 16-19
– Fi360 Conference / Nashville, Tenn., May 21-23
– CFA Institute’s 70th Annual Conference / Philadelphia, May 21-24
– FPA NorCalConference / San Francisco, May 30-31
– AICPA Engage 2017 / Las Vegas, June 12-15
– FPA NexGen Gathering / Chicago, June 23-25
– In|Vest 2017 / New  York, July 11-12
– RIIA Summer Conference 2017 / Salem, Mass., July 17-18
– XYPN17 And FinTech Competition / Dallas, Aug. 28-31
– Insider’s Forum 2017 / Nashville, Tenn., Sept. 6-8
– ADISA 2017 Annual Conference / Las Vegas, Oct. 23-25
– IMCA Private Wealth Advisor (PWA) 2017 / Chicago, Oct. 16-17
– FinCon 2017 / Dallas, Oct. 25-28

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The Wealth Adviser briefing covers topics of special interest to wealth managers, financial planners and other advisers. It’s delivered to subscribers by email each workday morning; you can sign up for email delivery here: http://on.wsj.com/WealthAdviserSignupPlease send tips, suggestions or other comments to michael.wursthorn@wsj.com or Wealth Editor Brian Hershberg at brian.hershberg@wsj.com.

Follow WSJ Wealth Adviser on Twitter: @WSJadviser

Source: WSJ

 

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