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DOL Fiduciary News: January 26, 2017

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Chamber: IMO Exemption Proof of DOL Fiduciary Fail

InsuranceNewsNet; January 25, 2017

Plaintiffs suing to kill the Department of Labor fiduciary rule seized on a new exemption offered by the department last week as evidence of the flawed process.

U.S. Chamber of Commerce attorneys argue that the DOL is conceding the futility of its rule by publishing a new exemption allowing independent marketing organizations to participate in the sale of fixed indexed annuities.

The response was filed in a Dallas federal court, where the chamber is the lead plaintiff. Judge Barbara M.G. Lynn heard arguments in the case Nov. 17, but has yet to rule.

Even if DOL fiduciary rule is delayed, many firms preparing to serve as fiduciaries; January 24, 2017

As industry awaits what insiders say is an imminent delay of the Labor Department’s fiduciary rule, one consultant says many financial institutions are planning to keep compliance protections in place even if the rule is ultimately dismantled.

“A number of our clients are saying they don’t intend to turn back,” said Jason Roberts, CEO of the Pension Resource Institute and a founder of the Retirement Law Group, which represent upwards of 90 financial institutions, accounting for 100,000 investment professionals.

DOL rule could lead to broader tech use, spread of fiduciary standard; January 25, 2017

A new report from Celent says that the conflict-of-interest rule from the Department of Labor could lead to a wider adoption of optimization software to assist in recommendations that would satisfy the fiduciary rule.

And the application of a fiduciary standard beyond the area of retirement could also happen regardless of any action against the rule that may be taken by the Trump administration.

Advice or selling? Why language matters in U.S. fiduciary battle

Reuters (column); Thu Jan 26, 2017 | 7:16am EST

CHICAGO -- The marketing come-ons of broker-dealers and insurance companies send this message: "We are financial advisers you can trust." But dig through court documents and the same companies argue something quite different: "We are just sales people."

The language gap helps explain what is at stake in one of the most important consumer protection initiatives of our time – laying down rules of the road for conflict-free retirement advice. That is the goal of the U.S. Department of Labor's (DoL) new fiduciary rule, a key initiative of the Obama administration that requires retirement advisers to put their clients' interests ahead of their own by eliminating conflicts of interest on retirement accounts.

Broker-Dealer Portfolio Management Programs Face Challenge

Financial Advisor; January 25, 2017

As the industry embraces a fiduciary duty, the widely used rep-as-portfolio manager programs at broker-dealers will be under scrutiny—and for good reason.

The programs let advisors run their own model portfolios with varying amounts of discretion.

But pockets of underperformance and the wide dispersion of results continue to plague the programs, B-D execs were told Tuesday at the Financial Services Institute annual meeting in San Francisco. At the same time, firms are facing pressure from regulators and from consumers to better understand how rep-as-portfolio manager (RPM) programs work, according to speakers at the conference.

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