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DOL Fiduciary News: July 17, 2017

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NAFA Speaker Says Impartial Conduct Standards Have Staying Power

ThinkAdvisor; July 13, 2017

Scott McCleskey today told financial services distributors that they should prepare for the likelihood that some form of the fiduciary standard will persist, even if the current version goes away.

Policymakers in Washington may eliminate the Department of Labor's current fiduciary rule, with its provision encouraging angry retirement investors to go to court, but the principle behind the rule has staying power, McCleskey said during a fiduciary rule compliance webinar organized by the National Association for Fixed Annuities.

"What will always be there will be these impartial conduct standards," McCleskey said.

House panel explores fiduciary rule fallout; July 14, 2017

Some financial service firms are “freely acknowledging” they stand to make more money servicing fewer clients as a result of the Labor Department’s fiduciary rule, which is expected to result in more retirement investors being moved to fee-based advisory accounts from commission-based brokerage accounts.

Rep. Bill Huizenga, R-MI, offered that claim during a House Financial Services subcommittee hearing exploring the rule’s impact on capital markets.

Huizenga claimed that representatives from several firms have told him that fee-based advisory accounts, which charge a percentage of assets annually and are recognized as being favored by the rule, will result in increased profits. The congressman did not identify those firms by name.

Would GOP alternatives to fiduciary rule raise the suitability standard?; July 14, 2017

House Republicans leading the charge to repeal the Labor Department’s fiduciary rule want to replace it with their own definition of a best interest standard for investment advice.

Republican proposals would allow brokers and insurance agents to sell proprietary products and earn commissions without accessing the prohibited transaction exemptions created in the fiduciary rule.

The question for lawmakers, stakeholders, and regulators is whether a best interest standard as defined in the legislation would be any improvement over the suitability standard.

Best interest is in the eye of the beholder in debate over DOL fiduciary rule

InvestmentNews (blog); July 14, 2017 @ 1:41 pm

By Mark Schoeff Jr. 

The term "best interest" is subjective it seems in the debate over the Labor Department's fiduciary rule. The phrase is used by both critics and supporters of the measure to describe what they're trying to do for the average investor.

The latest example of the fluidity of the term was seen in a July 13 hearing of the House Financial Services Subcommittee on Capital Markets, Securities and Investments. Lawmakers on the panel debated draft legislation offered by Rep. Ann Wagner, R-Mo., that would kill the DOL rule and replace it with a regulation written by the Securities and Exchange Commission that would "establish standards of conduct for brokers and dealers that are in the best interest of their retail customers," according to the preamble of the measure.

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