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DOL Fiduciary News: August 10, 2017

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DOL Seeks 18-Month Delay for Fiduciary Compliance 

ThinkAdvisor; August 9, 2017

The Department of Labor is proposing to extend the January applicability date of its fiduciary rule by 18 months.

In a filing with the court in the case being brought against Labor by Thrivent Financial for Lutherans, Labor Secretary R. Alexander Acosta told the court that on Wednesday, Labor submitted to the Office of Management and Budget proposed amendments to three exemptions: best-interest contract exemption; Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs; Prohibited Transaction Exemption 84-24 for Certain Transactions Involving Insurance Agents and Brokers, Pension Consultants, Insurance Companies, and Investment Company Principal Underwriters.

The proposed amendments extend the transition period and delay of applicability from Jan. 1, 2018, to July 1, 2019. 

Fiduciary supporters slam DOL's proposed 18-month rule delay; opponents applaud the move 

InvestmentNews; Aug 9, 2017 @ 2:45 pm

Supporters of the Labor Department's fiduciary rule are calling an 18-month implementation delay too long, while opponents are saying the postponement is needed to give the agency time to review the rule.

In a brief filed in a Minnesota lawsuit Wednesday, the DOL indicated it had submitted to the Office of Management and Budget a proposal to delay the remaining parts of the rule from Jan. 1, 2018, until July 1, 2019. The OMB must review and approve the proposal before it can go into effect. The delay itself could require its own rulemaking process.

The DOL delay proposal could be posted on the OMB's regulatory review list by Thursday morning

Delay of fiduciary rule not a done deal; August 9, 2017

The Labor Department has sent a proposal to the Office of Management and Budget to delay the January 1, 2018 implementation date for the full fiduciary rule by 18 months, to July 1, 2019.

If approved, the delay would extend the current transition period for the rule and postpone the rule’s prohibited contract exemptions.

...A streamlined transaction exemption that would account for new investment product innovations, and a sellers’ exemption, which would allow brokers and insurance agents to sell investments for commissions without triggering a prohibited transaction, are reportedly being considered. 

... But a delay is not guaranteed. Nor can OMB be expected to immediately sign off on Labor’s request, says Erin Sweeney, a labor attorney with Miller & Chevalier and a former regulator at Labor’s Employee Benefits Security Administration.

Dalbar puts a sellers’ exemption to fiduciary rule on Labor’s desk; August 9, 2017

Louis Harvey could be described as a fiduciary statesman.

The founder and CEO of Dalbar Inc., a Boston-based market research company that provides compliance support throughout the financial services industry, falls into a unique category of stakeholders when it comes to the Labor Department’s fiduciary rule: a fiduciary wonk who thinks the DOL's regulation is riddled with negative unintended consequences.

“I’ve rarely seen the level of minutiae included in this regulation,” said Harvey, who is also president of the non-profit Fiduciary Standards Board. “It is simply amazing.” 

Back in 2010, after the Labor Department pulled its first proposed fiduciary rule from the table, Harvey approached regulators with a suggestion: Craft a rule that prevents brokers selling investments from calling themselves fiduciary advisors.

How one 401(k) adviser is successfully prospecting clients under the DOL fiduciary rule 

InvestmentNews; Aug 9, 2017 @ 4:41 pm

The Department of Labor's fiduciary rule is expected to create a bundle of client prospecting opportunities for advisers specializing in retirement plans, as less-experienced 401(k) advisers exit the market or employers ditch them for a more knowledgeable adviser.

One retirement-plan specialist, Nathan White, has successfully put this concept into practice, gathering roughly 120 employers as prospects from February through July. That's 20 new prospects per month, on average, based solely off one DOL-related strategy.

"The number of opportunities is tremendous," said Mr. White, managing principal at SLW Retirement Plan Advisors, which oversees approximately $750 million in defined contribution assets in roughly 100 plans. "That's a game changer for us."

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