This week, more “fin” than “tech” news in the wealth management space. While FinTech startups continue fighting for open access to financial data, brokers continued fighting the new DoL regulation, and price wars continued with trading fees and fund expenses.
Fintech Startups Want to Save One Key Page of Dodd-Frank (The Wall Street Journal)
President Trump has threatened to do a “big number” on Dodd-Frank, which covers everything from banking regulation to credit cards to trading fees. Fintech startups are lobbying to keep Section 1033 in place, which gives them the right to access data from their customers’ bank accounts.
Brokers’ Ire Misdirected on Fee Rule (Bloomberg Gadfly)
Brokers are balking at the DoL fiduciary ruling by saying that it involves too much red tape, hurts consumer choices, and is too complex. However, this columnist argues that their biggest threat is investors moving towards low-fee investments that avoid conflicts of interest. He argues that brokers should focus on openly promoting high-fee products, rather than entering into backdoor arrangements with fund companies and passing the fees to individual investors without their knowledge. In the long run, client trust is the most important asset.
Online Brokerages Head Lower as Schwab Slashes Trading Costs (Seeking Alpha)
Charles Schwab reduced its trading fee from $8.95 to $6.95 – undercutting many of its competitors. The brokerage also joined the fund price war by reducing fees of mutual funds and some of their corresponding ETFs. On Thursday, brokerage stock prices fell from 5-10% on the news.