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William Galvin
William Galvin

Massachusetts’ Galvin Urges Appeal of Court Decision on DOL Rule

Galvin to continue to pursue his case against Scottrade, study sees shifts in the asset management industry and ETF ownership is on the rise.

William Galvin, Secretary of the Commonwealth of Massachusetts, issued a statement on Friday, condemning the Fifth Circuit Court of Appeals’ decision to vacate the Department of Labor’s fiduciary rule and urging the government to appeal. Last month, Galvin filed charges against Scottrade, alleging the firm knowingly violated the DOL fiduciary rule by holding a series of call nights and sales contests to drum up new business ahead of its planned merger with TD Ameritrade. The plaintiffs in the lawsuit include the U.S. Chamber of Commerce, responded to Galvin’s action by filing a document in the Fifth Circuit, urging the Court to vacate the rule in light of his charges against Scottrade. “In the meantime, my office will continue to pursue our cases against Scottrade, which involves violations of their own internal policies and my office retains the authority to pursue investigations involving dishonest and unethical practices,” Galvin said. “We will continue to work on all other investigations, including Wells Fargo, aggressively to assure that retirees are provided with retirement advice free of conflict.”

For Asset Managers, Near-Term Relief But Long-Term Shifts

Copyright Andrew Burton, Getty Images

Rising rates, robust economic tailwinds and tax stimulus in the U.S. promise a more favorable environment and provide near-term relief for both banks and active asset managers. But long-term trends mean a long list of challenges for asset managers, according to Morgan Stanley and Oliver Wyman’s 2018 annual report on the industry. Continuing to find alpha and other challenges aside, margins are already under pressure, and a bear market down the road would exacerbate the strain. Distribution could also face upheaval in the future. “We see uncertain outcomes and high regional variation, but believe the emergence of an Amazon-like ‘marketplace’ is a credible possibility,” the report summary said.

Half of Investors Could Own ETFs by 2020

ETFs are less than 30 years old, but their usage continues to grow. According to a BlackRock survey, half of all U.S. investors will own ETFs by 2020. Currently, one in three U.S. investors own at least one ETF, up from one in four last year. In total, there is about $5 trillion in global ETF assets, about $3.5 trillion of that is in U.S.-listed funds, MarketWatch reports. There are more than 2,100 U.S. ETFs on the market. “ETFs aren’t just having a moment. They’re creating a movement,” wrote Martin Small, the head of U.S. and Canada iShares at BlackRock, in an open letter entitled, “How did we ever live without them?”

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TAGS: Industry ETFs
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