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DOL Fiduciary News: February 2, 2017

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Justice Department continues to defend DOL fiduciary rule in court

InvestmentNews; Feb 1, 2017 @ 1:19 pm

The Department of Justice continues to defend a Labor Department investment-advice rule in a lawsuit in a Texas federal court almost two weeks after President Donald Trump was sworn into office.

In a Jan. 25 brief, financial industry plaintiffs asserted that a recent DOL proposal to ease compliance for some fixed-indexed annuities providers demonstrated that the advice rule would “upend” the distribution system and proved it was an example of “regulatory overreach.”

The industry also claimed that recent DOL guidance on the rule — which requires financial advisers to act in the best interests of their clients in retirement accounts — “transforms virtually all sales activity into fiduciary advice.”

DOL rule or not, be prepared to defend investments, fees under a fiduciary standard

InvestmentNews; Feb 1, 2017 @ 6:38 pm

Even though the status of the Department of Labor's fiduciary rule has been essentially up in the air since the election of Donald Trump, financial advisers should be preparing for the new realities of it given all the attention that has been paid to the controversial rule.

“Be prepared to define, document and defend your actions to regulators,” said Joe Taiber, managing partner at Taiber Kosmala & Associates, an investment consulting firm.

“Define what you're doing for the client, document the initiative and be prepared to defend how you arrived at the investment recommendations,” said Mr. Taiber, who was part of a panel discussing the impact of the DOL rule to a packed room at the TD Ameritrade LINC 2017 gathering Wednesday in San Diego

Brokers' Ire Misdirected on Fee Rule

Bloomberg (commentary); Feb 1, 2017 1:45 PM EST

By Nir Kaissar, founder of Unison Advisors,

Conflicts of interest won’t make brokers any richer. Not anymore.  If you’re in the business of recommending mutual funds to investors, you probably shouldn’t also take money from the funds you recommend. And if you do, you should probably disclose that to your clients, right?

That, in a nutshell, is the principle behind the Department of Labor’s fiduciary rule, issued last April over the moaning and wailing of brokerage firms and scheduled to take effect in two months. Critics of the rule are attempting to delay its effective date in the hope that President Donald Trump will revoke it in his anti-regulatory fervor.

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