Hey, guess what? Stocks and other investments can go up in value, but they can also go down. When someone gives you advice, you as an adult can listen to it. Or not. That’s what grownups do. But now people like Suze Orman (not my favorite person) and Dave Ramsey might not be able to tell their listeners to save their money and dump it into a Roth IRA, because soon regulators may insist that such people have a fiduciary responsibility to their listeners. Sure, they can give advice, but they might get sued if an investment goes the wrong way.
This is America today.
Ramsey Tweeted, “this Obama rule will kill the Middle Class and below ability to access personal advice.” A war of Tweets then broke out between opponents of the rule, and supporters, the latter of which includes fee-based investment advisers expected to benefit from the new costs the rule will shower on their broker competitors.
Fittingly, even before Ramsey came out against the rule, one of his critics called for using the rule against Ramsey, supposedly for providing advice said critic deemed harmful to savers. In an October article in LifeHealthPro, an online trade journal for insurance agents and financial advisers, Michael Markey, an insurance agent and owner of Legacy Financial Network, called for Ramsey to “be regulated and to be held accountable” by the government for the opinions he gives to listeners. Markey hailed the Labor Department rule as ushering a new era in which “entertainers like Dave Ramsey can no longer evade the pursuit of regulatory oversight.”
Experts both for and against the rule I have talked to agree its broad reach could extend to financial media personalities who offer tips to individual audience members, a group that includes not just Ramsey but TV hosts like Suze Orman and Jim Cramer, as well as many other broadcasters who opine on business and investment matters. They would be ensnared by the rule’s broad redefinition of a vast swath of financial professionals as “fiduciaries” and its mandate that these “fiduciaries” only serve the “best interest” of IRA and 401(k) holders.
Notice the life insurance guy pushing this rule.