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DOL Fiduciary News: June 2, 2016

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Groups Sue Obama Administration Over ‘Best Interest’ Rule for Retirement Advice

The Wall Street Journal; June 2, 2016 8:36 a.m. ET

WASHINGTON—A coalition of national financial and business trade groups ( filed a lawsuit Thursday to try to strike down an Obama administration rule aimed at shaking up the way Americans receive retirement savings advice.

The plaintiffs include the U.S. Chamber of Commerce, and associations representing the country’s biggest financial institutions, including the Financial Services Roundtable, and the Securities Industry and Financial Markets Association. They filed their suit in a federal court in Dallas.

Lawsuit could force delay to DOL fiduciary rule implementation

InvestmentNews; June 1, 2016 @ 1:53 pm

A pending lawsuit against the Labor Department's fiduciary rule creates uncertainty for the measure, even though the agency has expressed confidence it will hold up.

Four financial advice trade associations and the U.S. Chamber of Commerce plan to file the suit on Thursday, according to a source close to the matter who asked not to be identified.

Opponents will probably try to get a court to put a halt to the rule, according to Peter Chepucavage, an independent regulatory consultant.

Study to Look at Compensation Allowed by DOL Fiduciary Rule

Best's News Service via Bestwire -- June 01, 2016 03:56 PM

PHOENIX -- Opponents of the U.S. Department of Labor’s fiduciary rule update have commissioned a study to look at what brokers and advisers can be paid under the rule’s “reasonable” compensation system that largely displaces the commission-based fees clients were previously charged.

“The financial services industry and those who regulate it will be helped by a better understanding of what it means to the consumer to be advised in their ‘best interest’ and what factors are important when determining ‘reasonable’ compensation,” Paul Feldman, chief executive officer of Americans for Annuity Protection, said in a statement.

Insurance Experts Survey Post-DOL Annuity Landscape

Financial Advisor; June 2016 print issue

In early April, U.S. Department of Labor Secretary Thomas Perez released his office’s final determination on the extents and limits of the fiduciary standard for retirement products and the professionals who represent them. A key consideration was the handling of annuities.

Reactions were swift and diverse. But in the time since the announcement, many in the industry are still delving into the 1,000-page ruling and trying to decide if they like it or not.

What It All Means [small brokerages and the fiduciary rule]

Financial Advisor; June 2016 print issue

The U.S. Department of Labor’s final fiduciary rule may not be the death knell of small broker-dealers, but no one in the industry thinks it will help the little guys (defined by Finra as those with fewer than 150 reps), who are already struggling from regulatory and cost pressures.

Brokerage industry executives have been busy consulting with legal advisors and trade associations about what the DOL rules will mean, and what they might cost. So far, there are few clear answers. “By fall, we should have a better idea” about specific actions to take, says Robert Keenan, chief executive of St. Bernard Financial Services in Russellville, Ark., which has about 50 reps.

DOL Rule Means Lots of Homework This Year

Financial Advisor (column); June 2016 print issue

By Skip Schweiss, TD Ameritrade

After six years of deliberation, the U.S. Department of Labor last month released its much-anticipated conflict of interest rule for retirement plan advisors. Weighing in at 1,023 pages across seven regulatory releases, it’s far from easy reading.

But read it we must, and so we at TD Ameritrade are reviewing and analyzing the rule to determine what it may mean for investors and advisors. Though we’ve only just begun, we believe the new rule represents the most important, far-reaching and impactful regulatory change to the retirement advice arena in decades.

Unbilled Cash Complicated by DOL Rule

Financial Advisor; June 1, 2016

Fee-based advisors who don’t charge on cash balances may have to change that practice and start billing clients, thanks to the U.S. Department of Labor’s fiduciary rule.

Some advisors charge nothing on cash to avoid creating a loss for clients who earn little or nothing on cash balances, especially in cases where clients have set aside cash for a specific purpose.

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