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DOL Fiduciary News: August 14, 2017

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DOL fiduciary rule: Brokers, advisers hoping delay is time well spent

InvestmentNews; Aug 10, 2017 @ 1:48 pm

The 18-month delay of the Department of Labor's fiduciary rule will lead to more talk and more confusion, according to brokers and advisers.

"This [delay] is the stupidest thing I've ever heard, because the longer it goes on, the worse it is for consumers and my clients," said Frank Congemi, president and chief executive of Benefactor Financial.

Mr. Congemi, a broker who manages more than $100 million in client assets, is no fan of the DOL rule, but he is also no fan of the postponements that make it more difficult for financial intermediaries to adjust to whatever the ultimate fiduciary standard might be.

"Companies are already changing and creating new rules under the perception of a rule that hasn't even been enacted yet," he said.

Uncertainty Still Surrounds DOL Fiduciary Rule, Fi360 Says

Financial Advisor; August 11, 2017

Yet another potential delay of part of the U.S. Department of Labor's fiduciary rule perpetuates the uncertainty around this year’s long effort, says Blaine Aikin, executive chairman of Fi360.

Firms that have not fully complied with new regulations “have bought themselves some time, but for what?” Aikin asks.

The DOL indicated in a court case filed on Wednesday in Minnesota that an 18-month delay of the rules for exemptions to the fiduciary standard will be sought, which would postpone the implementation of the final parts of the law—set to go into effect in January 2018—until July 2019.

“The good thing is that the first piece of the new standards [that went into effect in June] are going to stick,” says the executive of Fi360, a provider of fiduciary training and tools, as well as the credentialing body for the Accredited Investment Fiduciary and the Accredited Investment Fiduciary Analyst designations.  

Retirement Rule Casualty: Brokers’ Mutual-Fund Offerings

The Wall Street Journal; Aug. 12, 2017 7:00 a.m. ET

Is less more when it comes to investor choice? That’s the question facing brokerage firms and investment advisers as they look to comply with a landmark retirement-savings rule.

Large brokerage firms typically offer thousands of mutual funds to clients. But compliance demands of the fiduciary rule, which began to take effect in June and requires stewards of tax-advantaged retirement savings to act in clients’ best interests rather than their own, are causing some firms to review their offerings.

Conducting the due diligence and documentation required on so many investments can be onerous, and under the rule, some firms may face increased litigation risks. As a result, brokerages may remove some funds—including those with higher fees or those that present perceived risks—from their sales platforms.

Survey Suggests Small-Balance Retirement Savers Hurt by Fiduciary Rule [FSR]

PLANSPONSOR.COM | August 11, 2017

Financial Services Roundtable (FSR) surveyed 600 financial professionals about the Department of Labor (DOL) fiduciary rule and found that 50% said it is preventing them from serving their clients’ best interests.

Further, 75% said they will serve fewer clients with $25,000 or less in assets due to increased compliance costs and legal risks, and 37% said the fiduciary rule is impacting their work methods “a lot.”

Eighty-three percent said the rule will require their clients to sign more paperwork or fill out more complicated paperwork. Thirty-five percent said their clients have expressed displeasure with the impact of the fiduciary rule on their service or fees. FSR submitted these findings along with its comment letter to the DOL following the regulator’s request for information (RFI) on the fiduciary rule.

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