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DOL Fiduciary News: August 4, 2017

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Prudential Financial: Fiduciary rule uncertainty dampened annuity sales in Q2; Thursday, August 03, 2017 2:11 PM ET

Uncertainty about the final outcome of the Department of Labor's Conflict of Interest Rule continues to impact sales of annuities, according to Prudential Financial Inc. executives.

Speaking on a conference call Aug. 3 to discuss second-quarter earnings results, Stephen Pelletier, chief operating officer of Prudential’s U.S. businesses, noted that the phenomenon is not limited to Prudential.

"In regard to annuities sales, we do think what we've seen this last couple of quarters, not just us but the industry, is meaningfully driven by continued ambiguity around final outcomes in the DOL fiduciary rule," Pelletier said.

"I think continued ambiguity regarding final outcome of the rule may still continue to have an impact on sales," he warned.

A Look Inside LPL’s DOL Fiduciary Strategy

ThinkAdvisor; August 3, 2017

Bill Morrissey admits it’s difficult to predict the future when it comes to the Department of Labor’s fiduciary rule, but he also admits he’s feeling confident in the work LPL Financial has done to comply.

“I am confident [in] the vast majority of the work we’ve done to comply with the DOL fiduciary rule, creating better tools, more solutions, better transparency, lowering fees,” Morrissey, head of business development at LPL, told ThinkAdvisor during the LPL Focus conference, held earlier this week in Boston.

“Whether the fiduciary rule is enforced on January 1, or it gets pushed back again, or it’s eliminated and another rule comes in its place — we’re going to go forward with the majority of these tools and these capabilities because they’re in the best interest of our clients,” he explained.

During the firm's earnings call with equity analysts last week, CEO and President Dan Arnold alluded that there has recently been “some reduction in that level of uncertainty” tied to regulatory issues such as the new Department of Labor fiduciary rule – a view that Morrissey told ThinkAdvisor he agrees with.

Fiduciary rule may not be fully implemented until 2019

Financial Planning; August 03 2017, 6:16pm EDT

Full implementation of the fiduciary rule may be delayed until 2019, according to an expert in ERISA law.

Although the current transition period for advisors to fully comply with the rule, which went into effect June 9, Bruce Ashton, an ERISA specialist and attorney for Drinker Biddle in Los Angeles, said he expects the Department of Labor to extend the transition timeframe past the end of the year.

“The department will most likely look at modifications, which have to go through the regulatory process,” Ashton said, speaking as a panelist on Financial Planning’s webinar, “Fiduciary Rule Best Practices.”

There will be a 60-day comment period after the Labor Department submits the revised regulation, and new rules won’t go into effect until after they become final, he noted. “I’m guessing it will take around 12 months, and there may be another transition period after that for firms to react and come into compliance,” Ashton said.

Fiduciary rule will top agenda for new head of SEC's Division of Investment Management

InvestmentNews; Aug 3, 2017 @ 2:25 pm

Leadership of the Securities and Exchange Commission's division that writes rules governing investment advisers is changing hands, as the agency renews its effort to raise advice standards.

The SEC announced on Thursday that the director of the Division of Investment Management, David W. Grim, is leaving in September after working at the agency for most of his 20-year-plus career. Mr. Grim is the last of the division heads appointed by former SEC Chairman Mary Jo White to depart.

The agency has not announced Mr. Grim's successor.

The Wall Street Journal reported in June that his likely replacement is Dalia Blass, counsel at Ropes & Gray and a former senior SEC Investment Management official. Ms. Blass' husband, David, recently stepped down as general counsel at the Investment Company Institute to join the law firm Simpson, Thacher & Bartlett, a move that was seen as a predicate to Ms. Blass' appointment. Neither of the Blasses responded to a request for comment.

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