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Commentary

How the Next President Can Impact Ordinary Investors

Major reforms may be unlikely, but through appointments and executive actions the next administration can still have an impact on investors.

While the next president may not find enough Congressional cooperation to tackle major initiatives such as tax reform or adjusting entitlement programs, there are many actions the president can take on his or her own, and many of these will affect ordinary investors. With the election almost here, it's worth taking a step back to look at how the next president's decisions will matter for investors--a group that includes millions of ordinary Americans saving for retirement.

As we all learned in high school civics, our system of government has checks and balances, and the next president will have to work with the legislature to pursue his or her agenda. Legislative action has become more difficult in recent years, as the country has entered a period of extreme polarization. Indeed, the last Congress was one of the least productive in modern times. As a result, there has been a significant shift to policymaking through executive actions--steps the executive branch can take on its own without Congress. For example, the Department of Labor's conflict of interest rule for retirement investment advice did not require (or get) Congressional approval. Of course, the president's tool kit is not unlimited, and many of the actions the president can take on his or her own take time and political capital--even if they don't require Congress.