Not really.

Source: DeAgostini/getty images

This Needs Saying. Helping Retirement Savers Isn't Like Slavery.

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”
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This past weekend, while waiting in a bank, I happened to overhear a broker from one of the country’s largest firms try to explain to his client why the U.S. Department of Labor’s new fiduciary rule was so terrible. It was an unpersuasive exercise in self-interest and the client was having none of it. “Why can’t you put my best interests first?,” he asked.

The fiduciary rule, which requires financial advisers to place the interests of clients with retirement-saving accounts ahead of their own, will be implemented sometime next year, assuming there are no additional delays. That also assumes that Donald Trump -- now polling on average about 7 percent behind Hillary Clinton -- doesn't win the presidential election.

But if he does win, one of the voices that might be the loudest in opposition to the fiduciary rule would be that of Anthony Scaramucci, an economic adviser to Trump.

Scaramucci is a managing partner at Skybridge Capital, which according to its website "specializes in funds of hedge funds." He believes the rule, according to an article in Investment News, “is an example of government overreach.” I disagree, and that is the subject of today’s discussion.

Before we dive into this, I want to say that I believe the best policy is always to put clients' interests first. No conflicts, much easier compliance, portfolios do better, everyone wins.

Why did the Labor Department, which sets the rules governing retirement accounts, shift to the so-called fiduciary standard? One reason is that the U.S. is poised for a financial retirement crisis. The math is inescapable: We have failed individually and collectively to save enough money for our golden years. This will be a huge issue during the next few decades.

The problem with the present system is that advisers don't have to put client's interest first. They are perfectly free to recommend investments that pay them the highest commissions provided they are considered suitable for the investor. By some estimates, this deprives retirement savers of as much as $17 billion a year. And given the scale of the gap between how much America and Americans have in retirement savings versus how much retirees will need to survive, every little bit helps.

Of course, the $17 billion is money that isn’t going to the financial industry, which goes a long way toward explaining the fervor of the opposition

But with Trump trailing by a wide margin in the polls, you might wonder why bring this up now? For the answer to that question, let's turn to what Scaramucci was quoted as saying at the Securities Enforcement Forum last week in Washington -- that the rule "could be the dumbest decision to come out of the U.S. government in the last 50 to 60 years…It's about like the Dred Scott decision."

Instead of getting worked up, I'm going to give Scaramucci the benefit of the doubt when he compares the fiduciary rule to the 1857 Supreme Court ruling which held that African-Americans were property, not U.S. citizens. The case has gone down in the history books as one of the worst Supreme Court rulings ever. Among law school graduates -- Scaramucci went to Harvard Law -- Dred Scott is shorthand for terrible decision-making. I suspect this was an artless attempt by Scaramucci to describe what he sees as bureaucratic intrusion into the financial markets, and that his intention wasn't to compare it to the crime against humanity that is slavery.

Much of Trump's campaign has veered off course into tropes that seem to appeal to racists, misogynists or antisemites. There's not much doubt about it, since he repeats the same themes over and over in his campaign rallies. I am certain that wasn't the case here. Those of us who write for public consumption are always looking for punchy ways to communicate dry or complex topics. But you have to be aware not only how your words will be interpreted, but misinterpreted. If it were me, I would apologize and move on. Then again, I'm the guy who does an annual mea culpa

The fiduciary rule is coming. It will have a big impact on retirement savings, mostly for the good. Thirty years from now, when its effects are felt in trillions of dollars in additional retirement savings, no one will remember how it came about -- or the ill-considered words of one financier.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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Barry Ritholtz at

To contact the editor responsible for this story:
James Greiff at