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DOL Fiduciary News: June 22, 2017

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3 Reasons DOL Fiduciary Rule Will Stay Intact: ERISA Attorney Wagner

ThinkAdvisor; June 21, 2017

ERISA attorney Marcia Wagner sees three reasons why the “tortured” Department of Labor fiduciary rule will prevail, and warns that if it doesn’t the United States will become the next Greece.

The Trump administration being the third one to look at the rule — behind the administrations of Presidents Barack Obama and George W. Bush (yes, at the time it was called the Investment Advice Rule) — “shows you how incredibly important the private pension system, broadly defined, is to our safety net of this country,” Wagner said Tuesday at the Financial Planning Association’s annual lobbying day in Washington.

“Appropriate oversight of fiduciary activity is necessary to protect retail investors who rely on pension and IRA assets for their security in old age … without due protections – and we can debate if the fiduciary rule goes too far or far enough – the U.S. can find itself in the unenviable position of countries where adequate protections are non-existent, and people are invariably harmed."

IMOs Have Tricky Path to Sales under DOL Rules

InsuranceNewsNet; June 22, 2017

Insurance marketing organizations (IMOs) are playing a guessing game while selling annuities under the Department of Labor fiduciary rules, experts say.

The issue is how to sell variable and fixed indexed annuities for the remainder of the year. Phase one of the DOL rules went into effect June 9, but with two “transition” exemptions: the Best Interest Contract Exemption (BICE) and Prohibited Transaction Exemption (PTE) 84-24.

Ideally, IMOs and field marketing organizations (FMOs) would sell under the transition BICE, said Michael P. Kreps, a principal at Groom Law Group. The transition BICE is less onerous than the transition PTE 84-24.

However, the BICE also requires a “financial institution” to oversee those variable and fixed-indexed annuity sales. IMOs and FMOs cannot serve as FIs under the DOL rules.

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