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DOL Fiduciary News: November 10, 2017

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TD Ameritrade’s Schweiss Does Not Want Advisor Fiduciary Duty Watered Down

Financial Advisor; November 9, 2017

When it comes to the fiduciary standard that investment advisors have lived by for 77 years, neither proposed delays and industry lawsuits nor infighting across regulatory lines should be allowed to weaken any future iteration of advisor rules, TD Ameritrade Institutional Managing Director Skip Schweiss told Financial Advisor magazine.

Schweiss, who works with 5,700 investment advisor firms as the head of Advisor Advocacy and Industry Affairs at the industry giant, discussed the future direction of regulation and the fiduciary debate as the TD Ameritrade’s 4th Annual Advocacy Leadership Summit was about to get underway in Washington, D.C. 

He's been a long-time proponent of a strong, industry-wide fiduciary standard.

FA: It’s a little like making odds in Vegas at this point, but what do you think is going to happen to the Department of Labor’s fiduciary rule, now that the agency has asked for a delay?

Schweiss: One of the things I like to clarify for people is the DOL rule went into effect June 9. The foundation of the rule—you must give advice that is in the best interest of investors—is still there. Some of the disclosures and contracts and warranties got pushed back with the OMB delay, which will probably get approved. It feels like what the DOL is trying to do is put a standard in place while putting some of the more onerous compliance components of the rule on hold perhaps to allow the SEC (Securities and Exchange Commission) to step in and apply the rule to all investment accounts to have more consistent regulation for all practitioners.

Inside Insight on Fiduciary Reform at Merrill Lynch and Beyond

PLANADVISER | November 08, 2017

News broke in just the last week that the Department of Labor (DOL) has submitted for review by the Office of Management and Budget a new regulation to provide for a second delay in full enforcement of the Obama-era fiduciary rule expansion and accompanying exemptions. 

Until the final rule’s pending publication in the Federal Register, the exact details and length of the second enforcement delay will remain unclear, but industry reports are widely discussing an additional 18-month delay. The extension is clearly crafted to give the Trump administration more time to consider what it will ultimately do with the signature rulemaking implemented late in the final term of his predecessor. In particular, this additional year-and-a-half of transition would give the DOL and the White House a reasonable amount of time to consider the vast amount of industry commentary submitted in response to President Donald Trump’s preliminary request for information about the current and future impacts of the fiduciary reforms.

With that news playing out in the background, John Quinn, who leads the institutional product development and platform management group at Bank of America Merrill Lynch, and Steve Ulian, leader of institutional retirement benefit plan sales and relationship management, sat down with PLANADVISER to discuss their firm’s broad approach to fiduciary reform. On the retirement side of the business, they suggest the firm is focused on promoting its Fiduciary Advisor Services program, which launched in June and allows a Merrill Lynch adviser working with institutional retirement plan clients to take on the role of a true 3(21) fiduciary.

Legal Limbo: Attorneys Await DOL Resolution

Retirement Income Journal; Thu, Nov 09, 2017

By Kerry Pechter

Merry L. Mosbacher runs the insurance and annuity business at Edward Jones, a financial services firm with 15,000 advisors. Todd Solash is president of Individual Retirement at AIG, the financial crisis survivor that sold some $7.4 billion worth of annuities in the first half of 2017.

These two influential annuity executives, a distributor and a manufacturer, respectively, probably agree on many issues. But they disagree on at least one: the value of fixed indexed annuities (FIAs) for investors. AIG sells a lot of FIAs, and Solash is bullish. Mosbacher remains unconvinced; there are no FIAs on Ed Jones’ product shelf.

Last Thursday they faced off on the topic, in a friendly way, in front of some 300 securities and insurance attorneys during the American Law Institute–Continuing Legal Education’s 35th annual conference last week at the Capital Hilton in Washington, in a conversation moderated by consulting actuary Tim Pfeifer, president of Pfeifer Advisory.

The indexed annuity market is, of course, in regulatory limbo. The Trump administration has at least temporarily stopped the implementation of parts of the Obama Department of Labor’s “fiduciary rule” that would make it harder to sell variable and indexed annuities to IRA clients for a commission. The rule, in its current form, would also create the potential for a wave of class action lawsuits against the financial industry.

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