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DOL Fiduciary News: July 14, 2017

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Fiduciary Debate Rages On as Wagner Pushes DOL Rule Alternative

ThinkAdvisor; July 13, 2017

Lawmakers and industry officials debated the merits Thursday of draft legislation put forth by Rep. Ann Wagner, R-Mo., that would repeal the Department of Labor’s fiduciary rule and apply a best interest standard to broker-dealers when providing investment advice.

During the Thursday hearing held by the House Financial Services Capital Markets Subcommittee titled the “Impact of the DOL Fiduciary Rule on the Capital Markets,” Wagner, chairwoman of the House Financial Services Committee’s Oversight and Investigations Subcommittee, and a steadfast opponent of Labor’s fiduciary rule, stated that her discussion draft “would apply a workable best interest standard for broker-dealers when providing investment advice without losing access for such advice for millions of low- and middle-income investors.”

Wagner stated that her draft bill also keeps the fiduciary issue “under the jurisdiction of the SEC, the expert regulator who has the experience of overseeing the industry.”

Mixed Reviews on Wagner Bill to Scrap DOL Rule

InsuranceNewsNet; July 13, 2017

New legislation proposed by Rep. Ann Wagner, R-Mo., would create a new advisory standard somewhere between fiduciary and suitability, said Rep. David Scott, D-Ga.

Scott, who has worked with Wagner on various fiduciary rule alternatives, is not on board with the congresswoman's latest bill – unveiled today during a House Financial Services subcommittee hearing.

“This bill is a very troubling bill," said Scott, adding that it “undermines the SEC’s rulemaking authority in this space. What if the market evolves? ... Why are we being so prescriptive in drafting this bill? Why don’t we allow the SEC to do their job.”

Wagner's bill would eliminate the controversial DOL fiduciary rule and its prohibited transaction exemptions.

LPL to roll out new mutual fund platform as DOL fiduciary rule takes effect

InvestmentNews; July 13, 2017 @ 1:38 pm

LPL Financial announced Thursday it plans to roll out a new mutual fund platform to advisers early next year to eliminate perceived conflicts of interest in compensation as the Labor Department's fiduciary rule is set to take full effect.

LPL, the largest independent broker-dealer in the U.S., told its 14,000 financial advisers the Mutual Fund Only platform would standardize their upfront and trailing compensation for mutual fund sales, and slightly reduce the number of fund families available to clients.

Advisers will receive a 3.5% one-time upfront commission for onboarding a client, who is then free to transfer funds in and out of 1,500 mutual funds across 20 asset management firms without incurring additional upfront sales charges. Advisers will receive a 0.25% annual trailing commission regardless of the subsequent fund selection.

Democrats diss draft legislation to scrap DOL fiduciary rule, set best-interest advice standard for brokers

InvestmentNews; July 13, 2017 @ 2:14 pm

Democrats rejected on Thursday draft legislation to kill the Labor Department's fiduciary rule and replace it with an investment-advice standard for brokers contained in the measure.

In a two-hour hearing of a House Financial Services subcommittee, Democratic lawmakers defended the DOL regulation, which requires financial advisers to act in the best interests of their clients in retirement accounts.

"I'm disappointed that we're going through this exercise again," said Rep. Carolyn Maloney, D-N.Y. "How many times do these efforts to repeal the fiduciary rule need to fail before my colleagues on the other side of the aisle realize that this is not a productive use of time and that the only realistic way to make changes to the rule is to engage with the Labor Department on reasonable changes that don't harm investors?"

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