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DOL Fiduciary News: December 6, 2016

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Eliminating Obama’s Fiduciary Rule Easier Said Than Done

The Wall Street Journal; Dec. 5, 2016 5:19 p.m. ET

Some on Wall Street already are celebrating the demise of the Obama administration’s fiduciary rule for retirement savings, but news of its death has been greatly exaggerated. Scrapping or even delaying the regulation, due to take effect in April, is tricky.

In simple terms, the Labor Department rule requires that financial advisers act in their clients’ best interest when guiding them on retirement-savings options, replacing a looser standard that their advice merely be suitable. In practice, this might steer more savings into cheaper passive investments. It also will favor fee-based investment products over those that pay advisers a commission.

Advisors Wary of Fiduciary Rule's Annuity Exemption

Financial Advisor; December 5, 2016

The Department of Labor is expected to make it easier for insurance agents to continue selling fixed-index annuities, but many financial advisors say allowing such an exemption defeats the purpose of the looming fiduciary rule.

“It allows for, what I believe is one of the biggest problems in the industry, which is people holding themselves out to be a financial planner or the like with limited licensing,” said Allan Katz, a financial advisor in Staten Island, New York.

Some $54.5 billion in indexed annuities were sold in 2015, a 13 percent increase from 2014, according to LIMRA.

Compliance and Fee Compression Are Top Concerns for Financial Advisors Ahead of DOL Fiduciary Rule Enactment, According to SEI

OAKS, Pa., Dec. 05, 2016 (GLOBE NEWSWIRE) -- A survey of 275 financial advisors released today by SEI Advisor Network reveals that in the wake of the impending DOL Fiduciary Rule, compliance issues followed by fee compression and an increased investment in technology are the top issues for financial advisors going into 2017. The survey, conducted at SEI Strategic Advisor Council Conferences held this fall, provides a first-hand look at advisors’ concerns and where they are planning to increase investments in their business next year. When asked what advisors are most concerned about going into 2017, the majority is equally (24 percent) concerned about two direct implications of the DOL Fiduciary Rule – fees and compliance, while their other concern is growing revenues.

Betterment presses Trump to keep DOL rule

InvestmentNews; Dec 5, 2016 @ 12:14 pm

Robo-adviser Betterment is reaching out to President-elect Donald Trump to keep him from gutting the Labor Department's fiduciary rule for retirement advice.

It ran a full-page ad in Monday's Wall Street Journal directing Mr. Trump to “stand on the side of America's 75 million retirement savers, not the firms with deep pockets who are lobbying” to protect their interests.

“Americans' right to honest financial advice is in jeopardy, and we are counting on you to protect that right,” wrote Jon Stein, founder and chief executive of Betterment, in the ad that ran on B12.

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