Blackrock, the world’s largest asset manager, urged a delay on a ‘fiduciary rule’ in the US, designed to force advisers to act in the best interests of their customers.
The company cited risk of ‘confusion’ for investors and unnecessary costs for the financial industry, after Trump’s administration ordered a review of the measures, originally endorsed by President Barack Obama.
Blackrock, who handle $5.1tn of assets and recently employed MP and ex-chancellor George Osborne for a reported £650,000 for four days a month, has requested a delay for an ‘unspecific length of time’ on the measures.
Their calls were shared by Vanguard who handle around $4tn for investors.
The rule, due to be implemented in April, was designed to stop conflict of interest and hidden costs in the investment market. However, Trump ordered a re-examination of the legislation, shortly after an executive order to review the Dodd-Frank Act – a series of measures brought in post-2008 to avoid a similar crisis. Both reviews signal a roll back of financial regulation created since the crash.
Blackrock says it would be ‘unrealistic’ for the Department of Labour to carry out the review within 60 days. Vice-Chair, Barbara Novick added that ‘a lack of certainty’ would put unreasonable costs and ‘burdens’ on financial services.
According to the Financial Times, lawyer Melinda Steuer, alongside forty Democrats and the Institute of Fiduciary Standard, urged the Department of Labor to go ahead with the plans.
“When financial advisers are allowed to put their own interests ahead of their clients, human nature dictates that the clients will not be well served. Retirees lose an enormous amount of wealth due to conflicted financial advice,” Steuer said.
Probably won’t read that in the Evening Standard.