DOL Fiduciary News: April 28, 2016
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Fiduciary Rule Casts Long Shadow Over 1Q Earnings
InsuranceNewsNet; April 27, 2016
Life and annuity companies begin releasing first quarter earnings this week and analysts will be hunting for as much guidance as possible on the Department of Labor’s fiduciary rule and how it will affect future company earnings.
Aflac, the Columbus, Ga.-based insurer, kicked off the earnings parade Tuesday by reporting net income of $731 million, or $1.74 per share diluted. Earnings, adjusted for investment gains, were $1.73 per share. Ten analysts surveyed by Zacks Investment Research expected earnings of $1.62 per share.
Opponents of New Retirement Rule Renew Efforts to Kill It
The Wall Street Journal; April 27, 2016 7:38 p.m. ET
WASHINGTON—Opponents of a new rule on retirement advice are regrouping to mount a fresh attack, as their initial optimism has given way to the realization of the regulation’s deep and long-lasting impact on the financial industry.
Three weeks after the Labor Department unveiled a tougher standard for brokers working on retirement accounts, the House is expected to pass a resolution Friday to scrap it.
Industry ‘Stuck’ With DOL Fiduciary Rule, but Fight Will Continue: Lawmakers
ThinkAdvisor; April 27, 2016
While the resolution to block the Department of Labor’s fiduciary rule will likely make it to President Barack Obama’s desk, Rep. Phil Roe, R-Tenn., conceded Tuesday afternoon that the president will veto it and the industry “will be stuck” with DOL’s rule.
At an event held on Capitol Hill by the U.S Chamber of Commerce, Roe, chairman of the Subcommittee on Health, Employment, Labor and Pensions, said that following the House Rules Committee meeting Wednesday afternoon, the rule for the resolution, HJ Res. 88 – which passed the House Education and the Workforce Committee on April 21 – will be considered on the House floor Thursday.
Even 'Softer' Fiduciary Rule Will Challenge Providers
PLANSPONSOR; April 26, 2016
Industry consensus has it that the Department of Labor (DOL) significantly softened key aspects of the final fiduciary rule published earlier this month, especially those pertaining to commissions and revenue sharing, but one long-term adviser warns the department’s apparent step back may turn out to be more rhetoric than substance, especially over the medium and long term.
American Equity could broaden annuities lineup in response to Labor Department's Conflict of Interest Rule
SNL.com; Wednesday, April 27, 2016 5:55 PM ET
The U.S. Department of Labor's Conflict of Interest Rule could force American Equity Investment Life Holding Co. to expand its suite of annuities products, after it warned that new restrictions placed on fixed-indexed annuities were "not drafted to be workable" for independent agent distribution of those annuities.
The insurer April 27 criticized the final regulation, commonly known as the fiduciary rule, for its surprise inclusion of fixed-indexed annuities among the financial instruments held to higher standards. Retirement investment advisers would need to sign contracts holding themselves accountable as fiduciaries if they want to sell the product, a requirement that life insurers believe will dampen the willingness to offer fixed-indexed annuities in the first place. American Equity derives more than 90% of its earnings from indexed annuities.
Fiduciary FAQs: Fact vs. Fiction [Principal]
April 27, 2016 10:20 AM EDT
DES MOINES, Iowa -- (BUSINESS WIRE) -- To help advisors understand their fiduciary responsibilities, as well as those of their retirement-plan clients, Principal Financial Group® has partnered with Groom Law Group to answer some frequently asked questions on the final fiduciary rule. (https://secure02.principal.com/publicvsupply/GetFile?fm=WW83&ty=VOP&EXT=.VOP)
“Like advisors, our goal is to minimize disruption for plan sponsors as we work to understand the impact of the new fiduciary regulation,” said Greg Burrows, senior vice president of retirement and income solutions at Principal®. “We want to help separate the facts from the myths in this changing environment.”
$130B in AUM affected by fiduciary rule, Franklin Resources CEO says
SNL.com; Wednesday, April 27, 2016 1:14 PM ET
Analysts focused their questions on assets affected by the U.S. Department of Labor fiduciary rule during Franklin Resources Inc.'s fiscal second-quarter earnings call.
The rule will affect an estimated $130 billion in assets under management at Franklin, Chairman and CEO Gregory Johnson said. That number is probably smaller than affected sums at Franklin's peers, he said, because the company is heavily concentrated in retail assets offshore and municipal bond funds. Of that total, about $30 billion is tied to 401(k) business, while the remaining $70 billion to $100 billion is in IRA business. About 9% of Franklin's sales have commissions, he said.
Kitces on fiduciary: How to comply and thrive (part 1)
Onwallstreet.com; Wednesday, April 27, 2016
The clock is ticking for the onset of an incredibly far-reaching new fiduciary rule..
After reading chapter and verse through the entirety of the Department of Labor’s fiduciary regulations, I’ve concluded that it amounts to a brilliantly executed strategy of conceding to the financial services industry the exact parts that didn’t actually matter in the long run (while still reducing the risk of a legal challenge), yet keeping the key components that mattered the most.