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DOL Fiduciary News: November 3, 2016

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American Financial does not expect material impact on business from DOL rule; Wednesday, November 02, 2016 2:16 PM ET

American Financial Group Inc. is making product and process changes to comply with the Department of Labor's fiduciary rule, but the company does not expect it to have a material impact on its business.

Co-CEO Stephen Lindner said on an earnings call that the company is proceeding under the premise that the DOL rule will not be changed by pending litigation.

"Our goal is to minimize disruption resulting from the implementation of the rule in April of 2017," the executive said.

Are advisers facing a pay cut under fiduciary?

Financial Planning; October 31 2016, 5:53pm EDT

Now that the Department of Labor has offered extended guidance on its fiduciary rule, wirehouses, regional broker-dealers, independent BDs and other regulated entities will need to revise their payout grids, with the very real possibility that advisers will see their compensation drop.

In the section dealing with compensation in the department's recently released frequently-asked-questions guidelines, the regulator is putting industry firms on notice that it expects them to overhaul their compensation policies to guard against conflicted advice in the retirement space.

Analysts: DOL Rule Will Depress Client Fees

InsuranceNewsNet; November 2, 2016

The Department of Labor has said its new fiduciary rules are intended to eliminate conflicts of interest created by high commissions.

But financial industry groups say overhead costs and, ultimately, fees are going to be affected as well.

“The Department of Labor’s fiduciary ruling is quite possibly the most significant regulatory action that financial advisors have faced in more than a decade,” stated Market Strategies, a Boston-based financial marketing services firm. “Many asset managers and distributors are spending millions of dollars in anticipation of the types of support advisors will need to adapt.”

The rising cost of benchmarking

Pensions & Investments; November 2, 2016, 10:33 AM

By Joe Mansueto, chairman, CEO and founder of Morningstar Inc., Chicago.

Institutional and individual investors today are paying substantially lower investment management fees than when Morningstar opened its doors more than 30 years ago. Why? More investment options, greater access to information, and demand for transparency from asset owners, regulators, media and firms like ours. The dramatic rise of lower-cost passive investments — including exchange-traded funds and passive open-end mutual funds — which now capture more than a third of the U.S. market, is evidence of this trend.

With the advent of the Department of Labor's fiduciary rule — which says financial advisers must make recommendations in the best interests of their clients to address conflicts of interest in retirement advice — investment expenses should continue to decline.

Sister Broker-Dealers CUSO Financial Services and Sorrento Pacific Financial Offer Additional Tools and Resources to Investment Programs to Address Upcoming DOL Fiduciary Rule 

November 02, 2016 12:00 PM EDT

SAN DIEGO -- (BUSINESS WIRE) -- Sister broker-dealers, CUSO Financial Services, L.P. (CFS) and Sorrento Pacific Financial, LLC (SPF), have released a series of resources, training and practical tools to help investment programs and advisors at financial institutions meet the requirements of the upcoming Department of Labor Fiduciary Rule, which deploys in April 2017 and will be fully implemented by January 2018.

Latest Fidelity Advisor Investment Pulse Survey Reveals Regulatory and Political Developments Remain Top Concerns

November 03, 2016 06:30 AM EDT

BOSTON -- (BUSINESS WIRE) -- Financial advisors were most concerned about regulatory and political developments in Q3 2016, according to the latest Fidelity® Advisor Investment Pulse study. More than 28 percent of the advisors surveyed said topics such as the Department of Labor’s (DOL) rule on investment advice and the upcoming general election were top-of-mind, a steady increase from nearly 21 percent in Q2 and 16 percent in Q1. The latest results of the quarterly survey were released today by Fidelity Institutional Asset Management, a distribution and client service organization dedicated to meeting the investment needs of financial advisors, institutions and consultants.

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