DOL Fiduciary News: April 8, 2016
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Fiduciary Experts: 'Historic' Rule Here to Stay
Financial Advisor; April 7, 2016
Despite some chatter about possible political or legal challenges to the DOL’s final fiduciary rule, the huge impacts on the industry are here to stay, according to several experts speaking at the Fi360 Insights conference in San Diego Thursday.
“This is an historic rule. What happened yesterday [with the release of the final rule] is a generational change,” said Duane Thompson, senior policy analyst at fi360, a consulting and training firm.
A Conversation with Jackson National’s CEO [DOL rule]
Retirement Income Journal; Thu, Apr 07, 2016
In 2015, when the variable annuity industry shrank overall, Lansing, Michigan-based Jackson National Life sold $23.11 worth of its Perspective II and Elite Access variable annuity contracts, according to the LIMRA Secure Retirement Institute.
Fee-Only Advisers Get a Break—and More Competition—Under Fiduciary Rule
The Wall Street Journal; April 8, 2016 5:30 a.m. ET
The Labor Department’s new fiduciary rule is an implicit endorsement of the business model that fee-only financial advisers have used for decades: getting paid only by their clients, to limit their potential conflicts of interest.
The rule released Wednesday includes a provision under which these advisers won’t have to sign new “best interest” contracts with clients before they can recommend rolling money from a workplace 401(k) plan to an individual retirement account. As registered investment advisers, fee-only practitioners are already “fiduciaries” required to act in clients’ best interests. By contrast, those contracts will be required for brokers and insurance agents who are paid commissions and other compensation that varies with the investments they suggest.
Wirehouses seen winning in DOL's final fiduciary rule
InvestmentNews; Apr 7, 2016 @ 12:01 am
Concessions in the final version of the Department of Labor's fiduciary rule will allow Wall Street brokerage firms to continue to sell proprietary products, something they originally feared they may no longer be able to do.
Secretary of Labor Thomas Perez released the revised rule Wednesday requiring advisers to act in the best interests of investors when providing investment advice for their retirement accounts. They've also gained an additional four months to implement the rule, with the DOL now giving them a full year.
Expect Close Monitoring During Fiduciary Rule Implementation
Financial Planning; April 6, 2016
WASHINGTON – Answering critics who claim the Labor Department caved to industry interests in issuing its final fiduciary rule, a top official countered that the new regulations will result in “major reform," while not ruling out additional government action.
The department will closely monitor the rule as it is implemented, "and if we think there is some continued abuse that hasn't been adequately addressed, we'll figure out what to do," Timothy Hauser, a deputy assistant labor secretary, told Financial Planning.
The Financial Industry Is Having Its Napster Moment
Bloomberg; April 7, 2016 — 8:04 AM EDT
Has the music stopped for the financial industry?
Just as record companies in the early 2000s had to deal painfully with the digitization of music courtesy of Napster and Apple Inc.'s iTunes, many asset managers are now facing a similar situation as more investors make the switch from high-priced, actively managed mutual funds to passive, low-cost, exchange-traded funds (ETFs) and index funds. When the dust settles in this sea change, the financial industry may be half of what it once was, simply because its revenues will be half of what they once were.