Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the official news that the Department of Labor fiduciary rule is really, truly, finally dead, as the 5th Circuit Court of Appeals finally issued its formal court mandate to vacate the rule.
Also in the news this week, following on the heels of the demise of the fiduciary rule, is the announcement that both Merrill Lynch and JP Morgan are considering whether to roll back their commission bans on retirement accounts as the fiduciary rule goes away (albeit to appeal to the subset of investors who actually wanted a commission-based account, because they didn’t trade often anyway, and were unhappy that the firms were using the DoL fiduciary rule as an excuse to force them into higher-cost fee-based accounts). And this week’s news also includes an important Supreme Court ruling in the case of Lucia v SEC, finding that the SEC’s administrative law judges are improperly appointed… although ironically, the Trump administration had already begun the process of shifting away from ALJs and towards appointed judges for government agencies anyway!
From there, we have a number of investment-related articles, including: the ongoing (and perhaps inevitable?) grind of mutual fund fees towards zero, as fund families find other ways to get paid instead; how the pressure on mutual fund fees is starting to push upstream to custody and clearing platforms, that often boost the expense ratio of funds by as much as 40bps to cover platform fees that most investors mistakenly thing are going to the mutual fund company and its managers when they’re not; and the last looking at how the rise of technology to manage large numbers of stocks may soon make it feasible for at least do-it-yourself investors to start creating their own rules-based investment algorithms that basically amount to their own personalized index fund.
We also have several additional articles on tax planning this week as well, from IRA planning strategies in 2018, to tactics to better manage investment advisory fees in a world where miscellaneous itemized deductions (including those for advisory fees) are no longer permitted, and a dive into the increasingly popular strategy for high-net-worth investors to get around the $10,000 deduction cap on property taxes by splitting up their real estate and transferring it in slices into a series of out-of-state non-grantor trusts.
We wrap up with three interesting articles, all around the dynamics of finding more productive uses for your time and energy: the first explores how, if you really want more time to connect with family and friends, the key is not to declutter your schedule with fewer obligations, but to add an obligation to your calendar specifically for family-and-friends time; the second looks at how the concept of “antifragility” can be applied directly in our own lives, especially when it comes to taking an ongoing series of small risks that give ourselves opportunity for a big outcome; and the last looks even further at how we can actually promote more serendipitous events in our lives, as research increasingly shows that “luck” is a material component of big success… but that some people are better at making their own luck with deliberate habits and strategies.
Enjoy the “light” reading!