The "fiduciary rule" proposed by the Obama administration's Labor Department was presented as a way to protect investors and redefine the way their brokers work with them. Fearing lawsuits, many brokers are now leaving their clients to find investing help from the internet.
The acting head of the SEC, quoted this morning in a Wall Street Journal editorial, alleges that the rule was designed to help somebody besides investors anyway:
In the opinion of Michael Piwowar, the Obama Labor Department’s proposed “fiduciary rule” for financial advisers is a vehicle to “increase profits” for trial lawyers, is “highly political” and was “never about investor protection.” Mr. Piwowar’s thoughts on the fiduciary rule, reported in Thursday’s Wall Street Journal, matter because he is the acting head of the Securities and Exchange Commission.
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In remarks last week at an SEC conference, Mr. Piwowar spoke on behalf of someone Mr. Trump might like. Regulators, he said “may inadvertently focus so heavily on the problems we perceive in the securities markets and our favored solutions to those problems that we forget the whole reason we are gathered here today: The Forgotten Investor.”
Stock markets have been hitting new highs in part because so many in the private economy are anticipating a government whose regulations and policies reflect such practical wisdom—for investors, business owners, health-care consumers and taxpayers. That’s the promise, and we hope Mr. Piwowar and the rest of the acting chiefs can hold the forts until a permanent Trump government arrives.
The editorial calls attention to Mr. Piwowar's title: he is acting head of SEC because many positions in the Trump administration remain unfilled. The Democrats' delaying Cabinet confirmations means that the administration is slow to have a Cabinet member who can staff the department. In Piwowar's case, this might not thwart the administration's goals. In many instances, however, it will.