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DOL Fiduciary News: April 18, 2017

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Insurers, consumer group, NAIC agree to embrace better annuity sales standard; Friday, April 14, 2017 6:01 PM ET

When the National Association of Insurance Commissioners holds an open meeting, the proceedings can be contentious. But when the NAIC's new Annuity Suitability Working Group convened in Denver over the past weekend, a wide array of insurance stakeholders agreed about the need for stronger state-based rules related to the sale of annuity products.

Underwriters, brokers, consumer groups and state insurance regulators are united in pushing for a stronger standard than the current state-based model. They hope that stronger standard can serve as a template for both state regulators and federal agencies.

SIFMA wants a 'time out,' seeking longer delay of DOL fiduciary rule

InvestmentNews; Apr 17, 2017 @ 5:05 pm

The biggest brokerage industry trade association is calling for a longer delay of the Labor Department's fiduciary rule, while a consumer group concludes that that the Trump administration has already decided to revise or repeal the rule.

In a Feb. 3 memo, President Donald J. Trump told the DOL to update the economic and legal analysis of the rule — which would require financial advisers to act in the best interests of their clients in retirement accounts — and revise or repeal the regulation if it is found to reduce investors' access to retirement advice, increase their costs, disrupt the financial industry or cause an increase in litigation for financial firms.

Ninety-Three Percent of Americans Think Financial Advisors Should Be Fiduciaries Despite Increasingly Uncertain Future of the Conflict of Interest Rule, Financial Engines Survey Shows

April 18, 2017 07:30 AM EDT

SUNNYVALE, Calif. -- (BUSINESS WIRE) -- While the fate of the U.S. Department of Labor’s conflict of interest rule (also known as the fiduciary rule) grows increasingly uncertain and more complex with its recent delay until June 9th, a new survey from Financial Engines, America’s largest independent investment advisor, shows that Americans overwhelmingly favor the intent of the rule. According to the survey, 93 percent of Americans think financial advisors who provide retirement advice should be legally required to put their clients’ best interest first. However, more than half of respondents (53 percent) mistakenly believe that all financial advisors are already legally required to put the best interests of their clients first.

Compared to a similar survey last year, Americans have a slightly better understanding of the difference between a financial advisor who is a 'fiduciary' and one who is not (21 percent understand the difference today, compared to 18 percent a year ago). However, many Americans still don’t know how to tell if an advisor is a fiduciary. Only 50 percent of investors who work with a financial advisor are certain that their advisor is a fiduciary, while 38 percent don’t know if their advisor is a fiduciary or not.

Advisers split on whether cutting fees for clients is good business

InvestmentNews; Apr 17, 2017 @ 2:53 pm

The increased price transparency of the financial services industry in recent years is leading more clients to ask their financial advisers for a break on fees.

Negotiating is fair game to some financial advisers. They're willing to discuss whether the client may not need all the services the adviser is providing or whether a discount is appropriate as the client's assets grow. But many other advisers draw a line in the sand and refuse to negotiate fees, even suggesting that those who would have the nerve to ask for a discount ought to look for another adviser — or perhaps a broker.

"They ask all the time, and I will not discount," said Brett Anderson, president of St. Croix Advisors in Hudson, Wisc. "Our industry is cheapening the value we bring to our clients by continually undercutting ourselves."

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