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DOL Fiduciary News: August 30, 2017

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OMB Approves 18-Month Fiduciary Rule Delay

ThinkAdvisor; August 29, 2017

The Office of Management and Budget approved on Monday the 18-month delay for the more onerous provisions of the Labor Department's fiduciary rule.

The OMB approval, which usually takes 90 days, took less than a month.

The delay must now be finalized by Labor.

Steve Saxon, partner at Groom Law Group, said that with the OMB review finalized, Labor will now release a proposed rule in the Federal Register with a comment period of no longer than 30 days.

“We do expect the delay to go through,” Saxon told ThinkAdvisor on Tuesday. “We think [Labor is] going to propose the extension and do a very short comment period and then approve it.”

DOL fiduciary rule: The 5 biggest things to watch for if BICE's class-action provision is killed

InvestmentNews; Aug 29, 2017 @ 2:23 pm

The Trump administration last week delivered a clear signal it aims to kill one of the most hotly contested parts of its fiduciary rule — the provision about class-action lawsuits.

Beginning Jan. 1 — or July 2019 if the DOL delays that implementation date — financial advice firms will have to enter into a contract with retirement savers if the firm receives variable compensation, such as commissions, when delivering investment advice. The contracts cannot waive investors' right to bring class-action litigation against the financial institutions.

The Trump administration is currently reviewing the Obama-era rule, and the possibility of this provision going away raises a number of important questions and takeaways for broker-dealers and registered investment advisers.

For clients to get the most from fee-based annuities, you need to dig into the numbers

MarketWatch (column); Aug 29, 2017 8:21 a.m. ET

Hardly a month goes by these days when an insurance firm doesn’t launch, or announce plans to launch, a fee-based annuity.

In fact, the insurance industry introduced almost two dozen fee-based variable and indexed products in the last 12 months, according to Scott Stolz, president of Raymond James Insurance Group.

In recent weeks, companies including Brighthouse Financial—the annuity provider recently spun off by MetLife—Symetra, Pacific Life, Nationwide and Allianz have joined the fee-based annuity fray that began in earnest when Jackson National Life Insurance launched its product in 2016. (Jefferson National launched what is regarded as the first generation fee-based product in 2005-06.)

Why the rush to market? Experts say these products are designed to comply with the Labor Department’s new fiduciary rule, which requires advisers to put their clients’ interest ahead of their own financial interests. In the past, advisers earned big commissions to sell annuities. With the new products, advisers will be able to charge a flat fee.

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