Skip to content

DOL Fiduciary News: September 23, 2016

Please Note:

These links will take you directly to the homepage of the website that features the article.

To reach the article directly, copy and paste the article title into the search feature on the homepage of the publication website.

Asset management industry sees DOL rule leading to new products, expense ratio changes; Thursday, September 22, 2016 1:52 PM ET

Advisers and investors should expect changes to the fund universe ahead of and following implementation of the Department of Labor's Conflict of Interest Rule. This is one of the takeaways from the September S&P Global Market Intelligence survey of its asset management and financial advisory client base.

Some of the asset management respondents to the S&P Global Market Intelligence survey responded that they expect their firm's operating model would change as a result of the rule. The most frequently chosen answer given was "changes in expense ratios for existing funds" followed by "creation of new products" and "increased focus on passive or index-based products."

DoL Fiduciary Rule Requires Reasonable Compensation; Supreme Court Says What Reasonable Is

Boston, Sept. 21, 2016 (GLOBE NEWSWIRE) -- The Best Interest Contract Exemption forces advisers with IRAs or retirement plans to divest all unreasonable compensation. But what exactly is reasonable? A new paper from Dalbar, “Assessing Compensation Reasonableness”, examines this question and offers some surprising answers directly from the orders of the US Supreme Court.

In its 2010 decision (Jones v. Harris), the Court affirmed the 25-year-old standard for reasonableness and discredited benchmarks that included anything that was not an “arm’s length” arrangement. The affirmed standard (derived from Gartenberg v. Merrill Lynch) requires that the determination of what is excessive be based principally on the nature and quality of services, adviser performance, cost of providing services plus a profit and must recognize economies of scale that are passed on to investors.

A copy of the full report is available at:

Fidelity's eMoney introducing DOL fiduciary compliance functions for advisers

InvestmentNews; Sep 22, 2016 @ 12:00 pm

Fidelity Investments is boosting the compliance functions of its eMoney Advisor financial planning platform to help advisers meet the Labor Department's new fiduciary requirements for retirement advice.

Its “fiduciary framework” will adjust the client on-boarding procedures and enhance monitoring and archiving of the interactions between clients and advisers, all to provide documentation that shows advisers acted in the best interests of clients when giving recommendations, company leaders told reporters Wednesday at the eMoney conference in Dana Point, Calif.

Moody's: Challenges arise for insurers, asset managers and distributors as DOL fiduciary rule implementation draws nearer

New York, September 15, 2016 -- Moody's Investors Service believes commission-based retirement and investment product sales will be more challenging for life insurers, asset managers, and advisors and distributors of these products, even with exemptions to the Department of Labor's new fiduciary rule. The new rule, set for a phase-in starting 10 April 2017, governs the behavior and compensation of advisors offering investment advice and/or selling variable annuities and fixed indexed annuities to ERISA pension plans and individual retirement accounts (IRAs).

Could You Be Sued Under the New DOL Rule?

Retirement Income Journal September 21, 2016

Will tort lawyers use the Best Interest Contract of the new Department of Labor fiduciary rule to turn financial advice into the next asbestos-related, or tobacco-related, or defined contribution fee-related federal class action legal bonanza?

Are small-scale independent advisors at risk of getting sued by disgruntled clients? Are employee-advisors at risk if their deep-pocketed broker-dealer employers get sued? Will clients sue insurance marketing organizations for ethical lapses by the agents they run?

Did you accomplish the goal of your visit to our site?

Yes No