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Goldman Sachs Group Inc. (NYSE: GS) alum and SkyBridge Capital hedge fund founder Anthony Scaramucci will soon be an advisor to President-elect Donald Trump.
This new appointment could bring with it the ultimate demise of the Department of Labor's controversial new fiduciary rule.
The fiduciary rule, expected to go into effect in April, would require retirement brokers to put clients' best interests first when making recommendations. It puts more responsibility and accountability on the brokers.
This might seem like a positive (if not plain logical) regulation change were it not for the hidden fees involved.
You see, it will cost brokerage firms millions of dollars to readjust their operations, software, and business models to abide by the rule, and those costs will likely fall back on the clients. The estimated costs for financial institutions to comply with the fiduciary rule start at about $1 million per month into 2018, then range from about $5 million to $10 million a year after that, according to Principal Financial Group.
Scaramucci's hedge fund in particular has a lot at stake, even though he has, as of yesterday, officially divested from it in order to officially take up his position in Washington.