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DOL Fiduciary News: May 9, 2016

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Figuring Out Where IMOs Fit in the Fiduciary Puzzle [conference coverage] 

InsuranceNewsNet; May 6, 2016

BOSTON -- One of the big remaining questions associated with life under the Department of Labor fiduciary rule is where IMOs fit.

The question came up Thursday during the 2016 Retirement Industry Conference hosted by LIMRA. The fiduciary rule places liability upon four designated financial institutions: banks, registered investment advisors, broker/dealers and insurance companies.

Insurers work to implement new fiduciary rule; MAY 08, 2016

WASHINGTON — The final rule imposing a new fiduciary standard on the sale of investment products by the Department of Labor (DOL) makes "some meaningful improvements" from the proposed rule, a top official of Prudential Financial said this week.

Stephen P. Pelletier, executive vice president & chief operating office of the U.S. business unit of Prudential, said a major change for the company’s adviser unit from the proposed to the final rule is that it made the process for obtaining the required contract under the Best Interest Contract (BIC) exemption "less onerous than it originally was."

Primerica details potential financial impacts of DOL fiduciary rule; Friday, May 06, 2016 3:58 PM ET

Although Primerica Inc. i[s] still working through the details of the Department of Labor's Conflict of Interest Final Rule, commonly known as the fiduciary rule, CFO Alison Rand said during the company's first-quarter earnings call that the final rule's grandfathering provisions would preserve asset-based earnings on qualified accounts, according to a transcript.

Rand said the company understands that, under the rule, existing client assets can continue in their historical compensation structure if no new advice is provided. The grandfathering provisions also cover old recommendations as well as rebalancing between mutual funds within a complex or variable annuity subaccounts, according to the CFO.

Figuring out Fiduciary 

InvestmentNews; May 9, 2016

Americans won hard-fought protections regarding the purity of their retirement advice last month. Now it's up to the nation's financial advisers to decide whether they'll meet the letter — and spirit — of the historic investor protection regulation.

The Labor Department's fiduciary rule is aimed at stopping the $17 billion a year the government claims investors waste in exorbitant fees. The idea is that the regulation will stop advisers from putting their own interests in earning high commissions and fees over clients' interests in obtaining the best investments at the lowest prices.

NAIFA: Amended DOL Rule Could Still Fuel Agent Exodus 

Best's News Service via Bestwire -- May 06, 2016 02:33 PM

WASHINGTON -- The National Association of Insurance and Financial Advisors remains worried that implementation of a U.S. Labor Department fiduciary rule update — which included concessions backed by NAIFA — could spark an exodus of agents and brokers from the retirement advice industry.

“That is too early to predict, but it’s quite possible,” NAIFA President-Elect Paul Dougherty, told Best’s News Service. “Many of the companies that we work with are taking this under consideration.”

Understanding The Fiduciary Rule's Best Interest Contract Exemption 

Financial Advisor; May 6, 2016

Uncle Sam taketh away, and then he giveth.

The U.S. Department of Labor’s fiduciary rule imposes a high standard on advisors making recommendations to retirement accounts—standards that appear to forbid the use of certain annuities, managed account programs and other products within retirement accounts—but it also gives advisors a powerful exemption that allows the use of such products to continue: the best interest contract.

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