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DOL Fiduciary News: November 2, 2016

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Merrill Lynch Ends Mutual-Fund Purchases in Commission IRAs

The Wall Street Journal; Nov. 1, 2016 6:53 p.m. ET

Clients of Bank of America’s Merrill Lynch brokerage can no longer buy mutual funds in retirement accounts that charge commissions, another sign that the effects of new retirement regulations are already being felt months ahead of implementation.

Starting immediately, Merrill clients who have a commission-based individual retirement account can no longer purchase a mutual fund, according to a memo sent to the firm’s more than 14,000 brokers. Merrill clients who already have mutual funds in a commission-based IRA won’t be forced to sell and can continue to make dividend reinvestments. However, after April 10—when the new retirement rules begin to take effect—clients won’t be able to add or make changes to their mutual-fund positions or make new purchases.

Cambridge Says Its Advisors Will Keep Commission-Based Accounts

ThinkAdvisor; November 1, 2016

Cambridge Investment Research on Tuesday joined a number of other broker-dealers who say they will continue to offer commission-based retirement accounts after the new DOL fiduciary rule goes into effect next year.

The other firms which had made this announcement recently include Raymond James Financial, Ameriprise Financial, Morgan Stanley and Cetera Financial Group.

John Bogle: SEC Should ‘Step Up’ and Issue a Fiduciary Rule

ThinkAdvisor; November 1, 2016

The Department of Labor’s fiduciary duty rule “is already changing the dynamics of defined contribution investing and will change the dynamics of IRA investing,” but the Securities and Exchange Commission should have been “the first in line” to issue a fiduciary rule, Vanguard founder John Bogle said Tuesday.

Speaking on a panel discussion at the John L. Weinberg Center for Corporate Governance at the University of Delaware, Bogle said the SEC should “step up to the plate” and issue its own fiduciary rule as DOL’s only impacts retirement accounts.

Annuities’ Future

Financial Advisor; November 2016 print edition

Unless you’ve been living under a rock, you know the Department of Labor (DOL) issued new standards for retirement products last April. Included among the items subject to a higher fiduciary standard are variable annuities (VAs) and fixed-indexed annuities (FIAs). But what exactly that means isn’t entirely clear. Yet.

Whether you believe the new regs will save the industry from unscrupulous practices or destroy it with unnecessary and overly complex rules, one fact appears indisputable: The industry and the products will have to adjust to fit the new regulations. As insurance companies scramble to redesign their annuities for this post-DOL world, how can advisors prepare themselves for what’s likely to be a complex transition?

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