Identifies fundamental errors, both mathematical and methodological, in the purported $17 billion annual benefit from the U.S. Department of Labor’s Conflict of Interest Rule, commonly known as the Fiduciary Rule.
Examines the methodologies and data used by the Council of Economic Advisers (CEA) in calculating the estimated $17 billion benefit of the Fiduciary Rule, and then recalculates the benefit according to the CEA’s stated methodologies and data descriptions. The approach is non-partisan, the review apolitical.
The article concludes that the estimated $17 benefit from the DOL’s Fiduciary Rule was grossly exaggerated and that other data suggests the Rule may not provide meaningful new protections for investors.
From the perspective of staunch fiduciary advocates, the calculation of the benefit to IRA investors from the DOL’s Fiduciary Rule is examined. The current measures that protect individual investors are also noted. The information may provide a turning point in the discussion of the Rule’s delay and potential rescission. It may also provide relevant points for the DOL to consider as it carries out its task of re-evaluating the Rule.
Schaff, J.E. and Schaff, M.L. (2017), "Debunking the $17 billion myth: the mathemagics behind the fiduciary rule", Journal of Investment Compliance, Vol. 18 No. 2, pp. 46-54. https://doi.org/10.1108/JOIC-04-2017-0027Download as .RIS
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Copyright © 2017, Michele L. Schaff and Jeffery E. Schaff.