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DOL Fiduciary News: September 6, 2016

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How Annuity Compensation Will Change Under DOL Rule

InsuranceNewsNet Magazine; September 2016

The Department of Labor fiduciary rule was published more than four months ago, but analysts say broker/dealers and their advisors still don’t fully understand how the rule affects compensation.

The rule allows commissions if they meet certain disclosures and the recommended investment product is in the client’s best interest.

But it isn’t quite that easy to put those words into practice and be in compliance, said Bradford P. Campbell, counsel at Drinker Biddle & Reath in Washington.

Market Watchers: Loss of IMOs Under Fiduciary Rule Changes Will Hurt Independent Agents 

Best's News Service via Bestwire -- September 01, 2016 03:40 PM

WASHINGTON -- Independent agents and brokers will face significant headwinds selling annuities and retirement instruments under the U.S. Labor Department’s fiduciary rule, which eliminates independent marketing organizations as their conduit for product sales, market watchers said.

“The IMOs can no longer do a complete job for the agents, who are now required to meet an additional standard,” said Michael Kalen, chief executive officer of Futurity First Financial Corp.

Companies Cutting Commissions from New Fixed Indexed Annuities

InsuranceNewsNet Magazine; September 2016

Here’s a signal that there’s still plenty of room for growth for annuity sales in the registered investment advisor channel. Great American Insurance Group introduced a zero-commission fixed indexed annuity to be sold by a financial professional who is both an insurance agent and an investment advisor representative affiliated with an RIA.

By stripping out agent commissions from its new Index Protector 7 fixed indexed annuity, Great American was appealing to fee-only RIAs as it released the product in August. In the past, these RIAs have shied away from selling commission-based FIAs.

Many Advisors Won’t Survive the DOL Rule 

Financial Advisor (commentary); September 2016 print edition

By Ric Edelman, chairman and CEO of Edelman Financial Services LLC

You know a revolution is brewing in our industry precipitated by the U.S. Department of Labor’s fiduciary rule.

The efforts of many in the financial services industry to stop it have failed so far. Congress couldn’t override President Obama’s veto of legislation that would have killed the rule, so the opposition’s only remaining weapon is the handful of lawsuits it filed in federal courts. That might delay the rule, but it won’t stop it.

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