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DOL Fiduciary News: April 24, 2017

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The SEC Can Reassert Fiduciary Role under Trump, Says Acting Chair

Financial Advisor; April 21, 2017

Michael Piwowar, the acting chairman of the Securities and Exchange Commission, said Friday that the onset of the Trump administration has given the SEC the opportunity to reassert its authority in determining what the fiduciary standard of care should be for broker-dealers and RIAs when working with clients.

Speaking to the Mutual Fund Directors Forum Policy Conference in Washington, D.C., Piwowar, a Republican SEC commissioner, used the opportunity to criticize the Department of Labor, complaining that it had no interest in working with the SEC to make its new fiduciary rule workable.

Financial firms, he said, have told him they are spending a lot of money on lawyers to comply with the rule and finding compliance is impossible. 

TD Ameritrade and Fidelity tweak RIA referral fees ahead of DOL fiduciary rule

InvestmentNews; Apr 21, 2017 @ 2:08 pm

Client-referral programs at the major custodian firms are being quietly revised in preparation for the Department of Labor's looming fiduciary rule, but some industry analysts still question whether the changes will be enough to pass muster under the new rules.

Both TD Ameritrade and Fidelity confirmed changes this month to the fees charged advisers for client referrals from their retail investor businesses.

At TD, the 150 registered investment advisers participating in the AdvisorDirect referral program have seen the fees they pay the custodian for client referrals altered from 25% of the annual fee they charge on referral assets to 25 basis points annually on those assets.

The fee drops to 10 basis points above $2 million, and to 5 basis points above $10 million

Independent broker-dealers hit a wall

InvestmentNews; Apr 22, 2017 @ 7:00 am

As commission revenue continued its decline in 2016 and headwinds from regulators stiffened, the independent broker-dealer industry hit a wall, with the top 25 firms — those with roughly $250 million and more in total revenue — collectively reporting a year-over-year decline in revenue of 1.3%.

It's the first time the industry has had an annual drop in revenue since the dog days of the credit crisis and stock market crash of 2008 and 2009. At that time, InvestmentNews reported year-over-year declines in total revenue of 2.1% and 10.3%, respectively, for the top 25 firms.

Just eight of the top 25 independent broker-dealers posted revenue growth in 2016: Ameriprise Financial Services Inc., Raymond James Financial Services Inc., Commonwealth Financial Network, Wells Fargo Advisors Financial Network, Cambridge Investment Research Inc., Royal Alliance Associates Inc., Signator Investors Inc. and Securian Financial Services Inc.

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