2020 VISION — OR REVISION?
ON
EVISION? axes and health insurance
ine in this election. BY JOHN HILTON
COVER STORY
W
ill it be another THWACK! of the tennis ball back to the fiduciary side of the court after the election? That is one of the critical questions to be answered in November in one of the most consequential elections of our time. Agents and advisors can expect that the fiduciary standard is likely to loom larger if Joe Biden wins, especially if he is accompanied by a Democratic majority in the Senate and House. President Donald Trump’s push to remove or simplify regulation led to a harmonization of standards across the product-selling spectrum, much to the dismay of many fee-only fiduciary advisors. Another key change advisors can expect is some serious restructuring of taxes. If Democrats regain control of the presidency and both houses of Congress, they are likely to go after Trump’s 2018 tax changes, along with other moves that might be necessitated by the national debt and policy preferences. The economy is concern No. 1 for 79% of people polled in an August Pew Research Center survey. Health care, which was No. 2 at 68%, is likely to be another top target for Democrats if they capture the presidency and Congress. Regulation. A Biden administration approach to regulation would likely cause a sea change that would take time to have real-world impact. A Biden Department of Labor is expected to pursue a true fiduciary standard for retirement account advice. In the interim, the Trump DOL is racing the clock to pass rules reinforcing the right to sell products into retirement accounts on a commission basis. If that rule is finalized and Trump loses the election, the Biden DOL would have to undergo a lengthy rulemaking process to repeal it and issue new rules. But the Democratic Party platform insists the Biden-Harris team is committed to doing just that. “If I were a betting man, I would say that we do have a fiduciary standard for taxable accounts within five years,” said Chip Roame, managing partner of Tiburon Strategic Advisors. “That would mean either in the next administration or in the first year of the one after that.” Taxes. Biden will most certainly raise a variety of taxes as soon as possible. The former vice president has pledged to limit tax hikes to those Americans earning more than $400,000, a vital constituency for financial services. This issue alone will keep advisors very busy. A Biden administration will “use taxes as a tool to address extreme concentrations of income and wealth inequality,” wrote a campaign task force. “A guiding principle across our tax agenda is that the wealthiest Americans can shoulder more of the tax burden.” Health care. Of course, Biden had a front-row seat working with President Barack Obama, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., to pass the Affordable Care Act in 2010. The vice president has October 2020 » InsuranceNewsNet Magazine
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