Bill Harris, the co-founder and CEO of Personal Capital, a digital wealth management company, is on a personal mission to save the fiduciary rule developed by the Obama administration’s Labor Department and the Dodd-Frank Wall Street Reform and Consumer Protection Act.
“It’s just common sense,” says Harris about the fiduciary rule. “How can you argue that a financial advisor should not advise in the client’s best interest? It’s a topsy turvy world when people make that argument.”
On Friday, the Office of Management and Budget disclosed that the Labor Department had filed a notice to delay implementation of the rule, which is set to begin to take effect on April 10. No details were available, including the time frame for the delay, but 180 days has been widely discussed.
(Related on Thinkadvisor: DOL Files to Delay Fiduciary Rule)
The OMB disclosure follows a decision by a Texas federal district court on Wednesday upholding the fiduciary rule, which is opposed by several business and financial trade groups including the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Financial Services Institute. It was the third federal court decision to favor the rule.
“The Fiduciary Rule Lives on in Texas, Only to Die in Washington, D.C.” reads the headline of a Personal Capital press release distributed Friday.
In another press release, Harris responded to comments that White House National Economic Council Director Gary Cohn made to The Wall Street Journal, likening the fiduciary rule to “putting only healthy food on the menu” because if you eat unhealthy food “you might die younger.”
“Encouraging people to die younger is one way to solve our retirement crisis,” wrote Harris, whose firm is an RIA with more than $3 billion under management. “But we think a better way is to encourage people to save responsibly and invest well, so they’re able to live a long life in financial security.”
Harris, who’s been visiting regulators in Washington and media outlets in New York, including ThinkAdvisor, is equally incensed about efforts to repeal Dodd-Frank, especially Section 1033, which requires that banks and brokers provide customers their financial data such as balances, transactions and fees electronically upon request. “How can you possibly argue with that?” says Harris.
In addition to the impact on individuals, such a repeal would also impact Personal Capital directly because it could lose access to key financial data belonging to clients such as bank account and retirement account balances and transactions and the fees involved. “Companies like us get all your financial data and put it in one place,” says Harris. “We’ve got tools that allow people to find all the hidden fees … and allow people to compare.”
Ten days ago, President Trump signed two separate directives. One was an executive order directing the Treasury Secretary to review existing laws and regulations to insure that they align with certain “core principles” of the administration such as rationalizing the federal financial regulatory framework, but Dodd-Frank was never mentioned by name.
The other was a memorandum directing the Labor Department to review the fiduciary rule that is due to take effect April 10. Trump signed the measures following a meeting with his economic council, which included JPMorgan CEO Jamie Dimon and Blackstone Group CEO Stephen Schwarzman. “There’s nobody better to tell me about Dodd-Frank than Jamie,” Trump said.
But, according to Harris, there’s no one more focused on restricting consumers’ access to their own financial data. “If, for instance, you are a bank that provides 401(k)s, the last thing you want is for your customer to be able to get their data electronically … that’s why they’re trying to shut it down. The whole thing is being led by JPMorgan, by Jamie Dimon. I’m going on a personal crusade against Jamie.”
A JPMorgan spokeswoman declined to comment on Harris’s criticism.
Asked whether his battle against the opponents of Dodd-Frank and the fiduciary rule was self-serving, “you bet, says Harris. “It’s in the best interest of my company but also in the best interest of my client and people retired everywhere.”
With that in mind, the company last week took a poll of its users asking for their thoughts about the potential repeal of the fiduciary rule and section 1033 of the Dodd-Frank Act and posted the results, including some videos. Most opposed the repeal.
“These guys are impassioned,” says Harris. “We have to put a face on this in both directions … on the investors who are trying to build their retirement and we have to put a face on the bad guys and that’s why I’m going after Jamie. He’s my face.”
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