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DOL Fiduciary News: August 29, 2016

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Self-Directed Retirement Savers May Hit Hurdles When Seeking Help

The Wall Street Journal; Aug. 26, 2016 1:09 p.m. ET

New federal rules governing how people save for retirement may limit the guidance that investors managing their own individual accounts can get from providers.

Rules handed down by the Obama administration in April, requiring brokers to put the interests of retirement savers ahead of their own, mostly will leave investors who manage their own individual retirement accounts untouched. That is because the owners of self-directed IRAs act as their own fiduciaries, while retirement savers who have brokerage accounts at firms such as Merrill Lynch or Morgan Stanley will have to rely on their broker to act as a fiduciary.

IMOs can anticipate hurdles ahead under the DOL rule; August 26, 2016

On August 12, LifeHealthPro chatted with Jason Smith, chief executive officer of Clarity 2 Prosperity, one of six independent marketing organizations (IMOs) seeking to become financial institutions under the best interest contract (BIC) exemption of the Department of Labor’s fiduciary rule. 

In this installment, we talk with Bradford Campbell, an attorney at Drinker Biddle who is former assistant secretary of labor for employee benefits and past chief of the DOL’s Employee Benefits Security Administration (EBSA). Counsel to four of the six IMOs, including Clarity 2 Prosperity, Campbell offered new details on the application process, hurdles still to be surmounted, and potential sticking points related to pending litigation over the DOL rule.

What Advisors May Not Know About the DOL Fiduciary Rule 

ThinkAdvisor; August 26, 2016

The DOL’s fiduciary rule may be the biggest regulatory change in the financial services business since the mid-1970s when brokers’ commissions were deregulated and IRAs were created. On April 10, the first of two effective dates for phasing in the rule, all broker-dealers, registered reps and insurance company agents earning commission-based compensation for work with retirement plans or IRAs will be deemed fiduciaries, which will require them to act in the best interest of their clients. Even RIAs, who are already fiduciaries, will be affected by the rule change.

Insurers to ‘Have Their Butts Sued Off’ Under DOL Fiduciary Rule: NAFA Lawyer 

ThinkAdvisor; August 26, 2016

Lawyers representing the National Association for Fixed Annuities told a U.S. District judge Thursday that individual insurance agents would be forced to become registered investment advisors under the Department of Labor’s fiduciary rule and that the current distribution system for fixed indexed annuities would have to be reworked.

Judge Randolph Moss, U.S. District judge for the District of Columbia, heard oral arguments for close to three hours Thursday in the first hearing against DOL’s rule, but did not immediately render a decision.

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