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DOL Fiduciary News: June 12, 2017

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DOL fiduciary rule takes effect, but more uncertainty lies ahead

InvestmentNews; June 9, 2017 @ 10:32 am

The Labor Department's fiduciary rule has partially taken effect, but its future, much like its past, is shrouded in uncertainty.

Two provisions of the measure, which requires financial advisers to act in the best interests of their clients in retirement accounts, become applicable today. One expands the definition of who is a fiduciary, and the other establishes impartial conduct standards.

How much of the rest of the rule will survive is an open question.

As DOL fiduciary rule takes effect, B-Ds focus on compliance

InvestmentNews; June 9, 2017 @ 10:41 am

After seven years of rule-making fraught with political intrigue, intense lobbying and an abundance of conjecture, the Labor Department's fiduciary rule is getting its day in the sun.

Today marks the beginning of a phased implementation period for the DOL's regulation, which raises investment-advice standards in retirement accounts and turned tens of thousands of brokers into fiduciaries overnight. As such, the rule completely redefines how brokerages can conduct business and how their brokers can interact with certain clients.

Broker-dealers have been working frenetically to get into compliance.

However, industry experts say there's much left to be done ahead of January, the second and final phase of the implementation, when the teeth of the rule fully sink in.

"This is going to be a very busy summer," said Marcia Wagner, principal at The Wagner Law Group.

RIAs tout their fiduciary status to clients as DOL rule implementation begins

InvestmentNews; June 9, 2017 @ 1:26 pm

Some registered investment advisory firms reached out to clients in advance of Friday's partial implementation of the Labor Department's fiduciary rule to clarify expectations for those who may be confused by increased chatter about "best interest" advice — and to reaffirm they are already acting as fiduciaries.

AEPG Strategies, a registered investment adviser, sent a note to clients earlier this week pointing out that it acts as a fiduciary 100% of the time.

"We wanted to put it in perspective for clients, whose expectations are generally that their financial professionals are going to be looking after their best interests all the time, but in fact some are fiduciaries sometimes and not other times," said Chris Schiffer, AEPG Strategies' chief operating officer.

The new DOL fiduciary rule only requires that brokers act under a fiduciary standard of care for individual retirement advice and other retirement plans, the firm's note to clients on Tuesday said. The firm said it would support a universal fiduciary standard for advisers requiring best interest advice for all financial matters, not just retirement.

Fiduciary rule enactment could bring adviser consolidation

Employee Benefit Adviser; June 08 2017, 4:05pm EDT

The fiduciary rule’s June 9 enactment could trigger a flurry of merger and acquisitions among retirement benefit adviser/broker firms, industry observers say.

Several firms that study consolidation in the financial services sector, including OPTIS Partners, point to several driving factors, chief among them: higher costs associated with adhering to a deeper level of plan compliance expertise from both an administrative and legal standpoint, including hiring more staffers.

Indeed, many independent agencies or brokerages “will be more apt to consolidate with larger businesses that can absorb the compliance [costs] through volume,” says Phil Trem, SVP at Marsh, Berry & Co., a leading M&A advisory firm. The company provides consulting services in the financial services industry to independent insurance agents and brokers, including those with an expertise in retirement planning.

Fiduciary rule will strengthen adviser, recordkeeper relationship

Employee Benefit Adviser; June 08 2017, 4:24pm EDT

With the final fiduciary rule implementation active June 9, retirement plan advisers still receiving commission as compensation would be wise to strengthen their relationships with recordkeepers, asset management experts say, in order to provide clients with a tangible justification for their payments. Recordkeepers have access to rich plan data, the experts recently told attendees at the SPARK Institute’s National Conference — and advisers must take advantage of it.

Mike Shamburger, head of territory sales at T. Rowe Price, and Sharon Scanlon, senior vice president at Lincoln Financial, told attendees at the Oxon Hill, Md., conference to identify and overcome challenges among distribution partners in gathering participant data, and emphasized the need for brokers and recordkeepers to come together in the wake of the fiduciary rule implementation to ensure advisers are utilizing all resources to provide strong client support at justifiable cost.

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