The date has been set: April 10, 2017

In one year’s time, an adviser to retirement investors will be required by law to put the interests of their clients first.

While this sounds absurd to the average American, unfortunately it’s true that advisers have been allowed to put their financial interests ahead of their clients. After years of hard work, the DOL has finally issued new regulations that require a duty of loyalty from your adviser.

Let’s take a walk down memory lane for a moment. Seven years ago…

Unemployment was 10%
Home prices had dropped 30%
The S&P 500 Index had fallen 57%

Today, we are talking about the new money market fund regulation. Why? Well, money markets are losing their implied guarantee of safety on October 16, 2016. Remember, when the Reserve Primary Fund, the oldest money fund, broke the buck on 9/16/08 after Lehman filed bankruptcy? Our government immediately set up an insurance program that guaranteed a $1 NAV for any covered fund to avert a run on money market funds.

Remember TARP? No? Right…it’s not the canvas you throw on your car. It was the $475 billion investment signed by President Bush on 10/3/08 for purchasing assets and equity from financial institutions to stabilize the financial sector. That was following the blank check written in July 2008 to shore up Fannie Mae and Freddie Mac and launch a foreclosure relief program. So far $187 billion has been committed to those programs.

The following Spring we witnessed the auto industry bailout and their suppliers. See a list of those companies that failed to repay their bailout money at https://projects.propublica.org/bailout/list/losses. $12.6 billion of the $17.3 billion that the taxpayers lost were due to GM and Chrysler.

Then the rule we love to hate the most…the Dodd-Frank bill, which was signed July 21, 2010, was designed to end “too-big-to-fail” taxpayer bailouts and to protect consumers from abusive financial services practices. However, the problems persist. Five of the largest banks submitted living wills in 2015 that are not credible. One of the four systemically important nonbank financial institutions just won a court order to lift its designation. The SEC, even after recommending a uniform fiduciary standard of conduct for broker-dealers on January 22, 2011, still hasn’t promulgated any rules to that effect. In today’s market, retail investors still don’t have any protection against advisers that put their own financial interests first.

It took us six years to get this far so it is not the time to let down our guard. Everyone hates new rules but shall we test the fate of our future and learn nothing from our past?

Click Here to view a few “dismal” charts on domestic equity performance, labor force participation, and government bond yields. Let’s talk.