DOL Fiduciary News: August 16, 2017
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Best-interest contract could be casualty of DOL fiduciary rule delay
InvestmentNews; Aug 15, 2017 @ 2:10 pm
The part of the Labor Department's fiduciary rule that has heartened supporters and caused heartburn for opponents, the best-interest contract, could become a casualty of the ongoing reassessment of the rule.
The DOL said last week in a court filing in a lawsuit over the regulation that it is seeking an 18-month delay in the implementation of the remaining parts of the rule. Two provisions became applicable in June.
The time-out will give the agency plenty of opportunity to undo the contract, which backers of the rule say gives it bite. Critics say it is too complicated and raises liability costs.
Under the legally binding agreement, brokers can earn variable compensation on products they sell to retirement investors as long as they act in investors' best interests. The regulation allows investors to file class-action lawsuits over violations, a provision that financial industry opponents are targeting.
CFP Board appeals for feedback on revised conduct standards
Financial Planning; August 15 2017, 2:22pm EDT
With time running out, the CFP Board is appealing to advisors for input on its newly updated standards of professional conduct.
The board will accept public comments on the revised standards through Aug. 21, before evaluating the feedback. The actual timetable for finalizing the document will depend on the comments received, according to its General Counsel Leo Rydzewski.
Among the more significant revisions, are new guidelines for providing digital advice and recommending that clients work with other professionals, such as an accountant or an attorney.
Concerning digital advice, the new standard "reflects the important role that technology plays in the delivery of professional services," Rydzewski says. "It begins with the obligation that a CFP professional must exercise reasonable care and judgment when selecting, using or recommending any software, digital advice tool or other technology while providing professional services. The CFP professional,” he adds, “must also have a reasonable understanding of the assumptions and the outcomes that the technology employs and a reasonable basis for believing that the technology produces reliable, objective and appropriate outcomes."