Skip to content

DOL Fiduciary News: April 2, 2018

Please Note:

These links will take you directly to the homepage of the website that features the article.

To reach the article directly, copy and paste the article title into the search feature on the homepage of the publication website.

Key lawmaker sees disclosure as most important part of investment-advice standard

InvestmentNews; Mar 27, 2018 @ 2:06 pm

Rep. Bill Huizenga, R-Mich., acknowledges that clients are sometimes harmed by their financial advisers, but he doubts that conflicted advice is rampant.

"I don't believe that there's a systemic and widespread issue," Mr. Huizenga said in a recent InvestmentNews interview. "Are there problems? Absolutely. We know that. We have problems because people are willing to break the law — whether it's a speed limit, whether it's selling investments or whether it's on nuclear treaties."

Mr. Huizenga's opinion about investment advice is an important one on Capitol Hill because he chairs the House Financial Services Subcommittee on Capital Markets, Securities and Investments. The House panel has jurisdiction over the Securities and Exchange Commission and legislation affecting retail investment advisers and brokers.

That puts Mr. Huizenga, 49, in a position potentially to influence the outcome of an SEC fiduciary rule, which the agency is likely to propose in the next couple months.

Although his subcommittee doesn't oversee the Labor Department, Mr. Huizenga opposes the Labor Department's fiduciary rule and wants the SEC to take the lead on the issue. His preference is for an SEC regulation that focuses on disclosures about the advice standards that investment advisers and brokers must meet.

CFP Board May Revise New Fiduciary Standard if SEC Sets Higher One: Keller

ThinkAdvisor | March 29, 2018 at 02:59 PM

As certified financial planners continue to digest the Board of Standards’ just-approved expansion of their fiduciary obligations to all types of financial advice, the CFP Board may be open to further changes if the Securities and Exchange Commission’s forthcoming fiduciary rule “sets a higher standard,” said Kevin Keller, CFP Board’s CEO.

The new Code of Ethics and Standards of Conduct, released Thursday, “reflect more than two years of work and multiple opportunities for input from a variety of stakeholders,” Keller told ThinkAdvisor in an email message Thursday. “We do not anticipate making any changes to the just-announced Standards that would alter the requirement that CFP professionals adhere to a fiduciary duty at all times when providing financial advice.”

That said, Keller stated that should the SEC “set a higher standard, we would look at revisiting our Standards.” CFP Board also believes, Keller added, “that our Standards can serve as a reference for the SEC’s own rulemaking. The public would be well-served by the SEC acting quickly.”

CFP Board’s board approved the second installment of revisions to its Standards, expanding a fiduciary duty to CFPs rendering all types of financial advice. The previous standards held CFPs to a fiduciary standard only when providing financial planning.

Richard Salmen, the board chairman, said on a Wednesday morning call with reporters that the board “unanimously” approved the new standards requiring CFPs to “at all times” act as a fiduciary when providing financial advice to a client. 

Are annuities finally getting some respect?

InvestmentNews; Mar 31, 2018 @ 6:00 am

For years, financial advisers have had a love-hate relationship with annuities.

The financial products, which offer a guaranteed stream of income, have long been maligned by some financial advisers and the broader public as being costly, confusing and opaque.

"I would die and go to hell before I would sell an annuity," Ken Fisher, founder and executive chairman of Fisher Investments, said in a recent video discussing the products. He said most annuities have "nosebleed-level fees," are difficult to get out of, are "extremely confusing" and are made to benefit salespeople over consumers.

The majority of annuity coverage by consumer media is either negative or neutral, according to a 2018 survey conducted by Cannex Financial Exchanges and Greenwald & Associates.

But that sentiment may be changing, especially if lawmakers are succeed in making it easier to buy annuities in retirement plans. Indeed, the combination of Americans' generally low savings rate and longer life spans has many looking to annuities as a big part of the answer to the retirement savings crisis.

Annuities come in a wide variety of product types: some expensive and complex, others more closely aligned to straight insurance for old-age income. Shoehorning them all into a single blanket item that an adviser either hates or loves discourages deeper evaluation based on a client's particular needs.

"I can make the economic research case for annuitizing at least part of your income, but people don't want to buy them, and they're just not [buying them] in any large numbers," said Michael Kitces, partner and director of research at Pinnacle Advisory Group Inc. "I wrote my first book on annuities 15 years ago. I thought they were promising then."

Did you accomplish the goal of your visit to our site?

Yes No