The fiduciary rule may not be perfect, but it will boost investor trust in wealth management firms, says Jim Weddle, head of Edward Jones.
Weddle, speaking at SIFMA's Private Client Conference in New York, expressed confidence that the industry would not only adapt, but benefit from the new regulatory environment.
"We have the challenge of new rules and regulations. We have that every year. We'll be able to adjust because we've been adapting forever," he says. "The difference this time is that the new rules will increase the public's trust and confidence in what we do for them. That's a good thing."
More than seven years since the financial crisis started, Wall Street remains anathema to broad swaths of the public. The Street has been the target of frequent criticism during the presidential campaign by candidates like Sen. Bernie Sanders (D-Vermont).
Proponents for the fiduciary rule argued in its favor on the basis that it was necessary to protect clients, particularly small investors, from unscrupulous brokers trying to profit off clients through hidden fees. The Labor Department's rule only governs retirement advice.
Weddle pointed to the opportunity for wealth management firms and advisors to assist the nation's estimated 77 million baby boomers who are either in or are entering retirement.
"They value our advice. And they'll be transferring some of that wealth to their children and grandchildren. We have the opportunity to help them to do it well," he says.
Adapting to the rule would be no small feat.
"We've had a couple hundred people working on this for the past six months. A massive effort that I think will pale to the staff we will have to dedicate going forward," Weddle says.
Weddle still has some criticism for the Labor Department's efforts, noting industry concerns around how regulators would enforce the rule. He adds that it will take time to parse the rule's more than 1,000 pages.
But from his initial review there were aspects to like, he says, and just as importantly, it was necessary to move forward as firms now have no choice but to comply.
"We don't have to like everything in the release, but we do have to follow it. So let's move on," he says.