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DOL Fiduciary News: January 23, 2018

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Broker Protocol Exodus Could Cause Breakaway ‘Spike’ in Next Few Months: DeVoe

ThinkAdvisor; Jan 21, 2018

In the last year, anticipated fiduciary regulations from the Labor Department set off a “roller coaster” of breakaway advisor activity. And the anticipated legal implications of high-profile exits from the Protocol for Broker Recruiting could impact M&A this year, according to the just-released edition of the Nuveen/DeVoe RIA Deal Book.

“RIA M&A activity continued its momentum, but the pace of acquisitions slowed from a sprint to a light jog,” David DeVoe, managing partner at DeVoe & Company, said in a statement. “Although the breakaway advisor activity has and will be whipsawed by external drivers, the underpinnings of established RIA sales essentially remain unchanged.”

The just-released edition of the Nuveen/DeVoe RIA Deal Book showed that the RIA industry experienced its fourth successive record year of merger and acquisition activity in 2017. A record 153 transactions were tracked during the year, a 6% increase over last year’s high-water mark of 145.
(http://www.thinkadvisor.com)

How advisers can manage IRA rollover risk under the DOL fiduciary rule

InvestmentNews; January 19, 2018 @ 1:13 pm

Advisers need to examine their practices for IRA rollovers in the new fiduciary environment created by the Department of Labor's conflict-of-interest rule.

As background, there are three ways an adviser can help a participant with a rollover. Those are:

• Unsolicited

• Education

• Recommendation

The third point — a recommendation — is a fiduciary act. The first two are not; however, for those, advisers should document that the rollovers were unsolicited or were based on education and, therefore, did not result from a fiduciary recommendation.

An unsolicited rollover is one where the participant has made the decision to roll over from a workplace retirement plan to an IRA, without input from the adviser, and then asks the adviser for help with investing the IRA. For risk management purposes, the adviser should have the participant sign a statement to that effect as a part of the account opening process.
(http://www.investmentnews.com)

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