Skip to content

DOL Fiduciary News: August 18, 2017

Please Note:

These links will take you directly to the homepage of the website that features the article.

To reach the article directly, copy and paste the article title into the search feature on the homepage of the publication website.

Plenty of advisers eager to scoop up 'orphaned' accounts

InvestmentNews (column); Aug 17, 2017 @ 1:05 pm

The financial services industry would like to kill the Department of Labor's fiduciary standard. It's expensive to put into place, and the industry's grave fear is that it leaves brokers open to substantial legal risk.

As part of its effort to shut down the fiduciary standard, the industry is making dire warnings about tens of thousands of so-called "orphaned accounts" resulting from the DOL's new rule. Accounts without a home will be a catastrophe, the industry warns.

"The number of accounts that have been orphaned (i.e., accounts no longer serviced by an adviser, leaving investors on their own) has increased significantly due to the rule," according to the Insured Retirement Institute, a trade association that represents insurance companies, asset managers, broker-dealers and 150,000 financial professionals. "In a July 2017 survey of IRI members, a number of IRI distributor members reported that approximately 155,000 of their clients have already been orphaned, with far more accounts expected to be impacted as implementation of the rule proceeds."

Morningstar proposes enforcement alternative to fiduciary rule’s BIC exemption; August 17, 2017

As the Office of Management and Budget considers a proposed 18-month delay of the fiduciary rule by the Labor Department, some in industry are holding out hope that the rule will be rescinded, if not gutted to the point of effective extinction.

Neither is likely, says Aron Szapiro, director of policy research at Morningstar.

“I’ve been saying that since last year’s election,” Szapiro told BenefitsPRO. “And I’m more confident in that belief now than ever.”

From the specificity of questions raised in Labor’s request for information in support of its review of the rule, to the tone taken by Sec. Alexander Acosta in his Wall Street Journal op-ed announcing that the rule’s impartial conduct standards would not be further delayed, Szapiro says the tea leaves are clear: Anyone expecting the rule to die a slow death is making the wrong bet.

Here’s What to Expect if You Sell Annuities

InsuranceNewsNet; August 17, 2017

Over the next three years, retail life and annuity agents and financial advisors can expect simpler annuity structures, more fee-based annuities and fewer riders and income guarantees in product rollouts, a consultant said Wednesday.

The days when annuities giants pumped out an “overwhelming volume of complex, tough-to-understand annuity products are gone,” said Chris Eberly, vice president of research and consulting with Novarica, an insurance IT consultancy.

Insurers instead have focused on “a few key blocks of business and simplifying products within those blocks.”

These days, insurers are guided by low interest rates, new regulation and targeting retail clients based on income needs rather than what companies can sell.

Did you accomplish the goal of your visit to our site?

Yes No