Rekenthaler Report

Should All Investment Advice Be in the Customer's Best Interest?

John Rekenthaler

Nothing Personal, Just Business
The Department of Labor's so-called fiduciary rule, which established stricter regulations for investment advice on retirement accounts, was struck down last month in the 5th U.S. Circuit Court of Appeals. However, the court didn't prohibit government agencies from changing the laws for investment advice; rather, it stated that the agency in question had overstepped its bounds. Thus, the debate remains.

Into which Bloomberg's Matt Levine lobbed a grenade. Writing about the Wells Fargo sales scandal, created when the company's leaders set goals so aggressive that the rank and file produced false accounts to satisfy them, Levine states, "I have often gotten the impression that people think that the real scandal was that [Wells Fargo] set any sales targets, that it wanted its bankers to sell products rather than just listen to customers and give them the best possible advice for their own situation." This, Levine comments, is how it should be.