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DOL Fiduciary News: May 13, 2016

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Allianz: DOL Might Pull FIAs out of BICE 

InsuranceNewsNet: May 12, 2016

A senior executive with the top-selling fixed indexed annuity (FIA) insurer in the U.S. said the Department of Labor might pull FIAs out of the most restrictive exemption when sold in retirement accounts.

Regulators added FIAs to the Best Interest Contract Exemption in the final version of a fiduciary rule, or “Conflict of Interest” rule, published April 6, because they are considered complex. The BICE requires hefty disclosures and a signed contract with clients.

Broker recruitment bonuses on DOL's radar

InvestmentNews; May 12, 2016 @ 1:35 pm

Buried in the sprawling, 1,000-plus-page Department of Labor fiduciary rule released last month are two references to “recruitment compensation,” the lucrative bonuses brokers receive when leaving one firm to join another.

The references have securities industry attorneys, typically a nervous bunch on their best days, all aflutter. They get anxious when new rules take effect and they don't immediately have clarity about their meaning. The published rule doesn't give much detail and simply lists “recruitment compensation paid in connection with transfers of accounts to a registered representative's new broker-dealer firm,” in a list of 10 other potential types of payment under the rule's explanation of ''fee or other compensation, direct or indirect.''

Memo to Congress: Americans Want Financial Advice in Their Best Interest [AARP]

WASHINGTON, May 12, 2016 /PRNewswire-USNewswire/ -- Today AARP released survey results that show 9 in 10 Americans agree with the recently announced US Department of Labor (DOL) rule that will require professional retirement plan advice to be in a client's best interest. The survey comes as the US House of Representatives voted at the end of April to stop protections for retirement investors that require best interest advice. The rule, finalized at the beginning of April, is expected to save middle-class families billions of dollars per year.

"Americans have been losing billions of dollars every year receiving retirement savings advice from financial advisors not committed to giving recommendations in their clients' own best interest," said AARP Executive Vice President Nancy LeaMond. "It's telling that while all seem to publicly agree with this standard, many still want to stop this rule from going in to effect next year.

Orphaned accounts, and what the DOL may have to reconsider; May 13, 2016

The leadership at Retirement Clearinghouse, LLC, thinks it may have the panacea for the billions of dollars’ worth of orphaned 401(k) assets fruitlessly loitering in retirement asset limbo.

This week, the firm will roll out its Auto Portability Simulation application at the Employee Retirement Benefit Research Institute’s annual policy forum in Washington, D.C.

Smaller IRAs may be fine in packaged portfolios; May 12, 2016

Opponents of the Department of Labor’s fiduciary rule have spoken out loud and long against its potential effects on smaller IRA accounts—but new Cerulli research may counter their arguments.

According to critics of the rule, smaller investors will lose out on personalized advice and individually tailored portfolios, since advisors unable to collect commissions for their advice will shed those smaller accounts. So those small account holders will be cast adrift, unable to access financial advice at a reasonable cost.

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