DOL Fiduciary News: June 2, 2017
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Labor Department gets earful on fiduciary rule from industry opponents
SNL.com; Thursday, June 01, 2017 5:00 PM ET
The U.S. Department of Labor is holding meetings with industry players over the Conflict of Interest Rule ahead of what could be a new rulemaking process.
Officials including Acting Solicitor of Labor Nicholas Geale hosted a closed-door meeting May 30 on the so-called fiduciary rule after a broad range of financial services industry stakeholders requested time to share their views, according to sources. The Department of Labor confirmed the Tuesday meeting but did not comment further.
Trade groups at the May 30 meeting included, among others, representatives from the Insured Retirement Institute, the American Bankers Association and the American Council of Life Insurers. All the groups in attendance at this meeting had been vocal in their opposition to not only the June 9 implementation but the rule itself, a source familiar with the meeting noted.
(http://www.snl.com)
SEC Jumps into Fiduciary Rule Fray, Seeking Comments on ‘Future Action’
ThinkAdvisor; June 1, 2017
Securities and Exchange Commission Chairman Jay Clayton said Thursday that the agency is seeking comment on a laundry list of issues to inform “possible future actions” by the agency on a fiduciary duty rulemaking.
Noting Labor Secretary R. Alexander Acosta’s recent announcement that Labor’s June 9 compliance date will move forward, Clayton said that the rule “may have significant effects on retail investors and entities regulated by the SEC,” as well as “broader effects on our capital markets. Many of these matters fall within the SEC's mission of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation.”
(http://www.thinkadvisor.com)
Are financial advisers really ready to be fiduciaries?
InvestmentNews; June 1, 2017 @ 11:20 am
The Department of Labor's fiduciary rule for retirement accounts will take effect at the end of next week, and advisers and their broker-dealers better get ready for a new wave of risk: lawsuits and legal complaints by investors who believe they have been harmed by an adviser's recommendations or choice of investment.
The Big Daddy of liability facing firms, the best-interest contract exemption, does not kick in until January 1 of next year. As has been widely reported and discussed, the BICE is a provision of the fiduciary rule that will give investors the right to bring class-action litigation against financial firms.
Brokerage firms are extremely fearful about potential litigation and the cost of lawsuits brought due to the BICE. Some have gone as far as eliminating sales of products that charge a commission to clients with retirement accounts in order to remove any whiff of conflict of interest.
(http://www.investmentnews.com)
UBS to Temporarily Adjust Broker Pay to Comply with Fiduciary Rule
The Wall Street Journal; June 1, 2017 5:17 p.m. ET
UBS Group AG is temporarily revamping how it pays its U.S. brokers to comply with new retirement rules taking effect next week, a stopgap that minimizes the impact on clients as a review of the regulation plays out.
The Swiss bank, which has been critical of the new rules and their impact on clients, is effectively wagering that the Labor Department’s fiduciary rule requiring brokers to act in the best interest of retirement savers will change in its favor and require less-sweeping changes than rivals like Merrill Lynch and Wells Fargo & Co. have made.
The rule takes partial effect June 9, but a Labor Department economic-impact review is being conducted before the rule takes full effect on Jan. 1, 2018.
(http://www.wsj.com)
LPL tweaks pricing of investment products in preparation for DOL fiduciary rule
InvestmentNews; June 1, 2017 @ 4:11 pm
LPL Financial continues to revamp its pricing of investment products in preparation for the Department of Labor's fiduciary rule, informing advisers on a conference call on Thursday morning that, going forward, there would be level compensation on fixed annuities and unit investment trusts.
In a memo describing the changes sent to LPL's 14,000 advisers later in the day, the firm said it also restricting the purchase of no-load mutual funds in brokerage accounts in order to move to greater standardization in compensation in the mutual fund category.
Brokerage firms have been adjusting their investment platforms over the past year in preparation for the fiduciary rule, which is scheduled to take effect June 9.
(http://www.investmentnews.com)
Despite No More Delay, DoL Fiduciary Still Not A Done Deal Yet!
Kitces.com, May 25, 2017
The big news this week was an Op-Ed published by Labor Secretary Acosta in the Wall Street Journal that declared, in no uncertain terms, that there will not be any further delay in the Department of Labor’s fiduciary rule beyond June 9th. Despite all the industry protests, that have continued for more than a year, and various attempts at (further) delays, financial advisors who provide investment advice to retirement investors will be required to adhere to the “Impartial Conduct Standards” after June 9th, requiring that they give Best Interests advice, for Reasonable Compensation, and make No Misleading Statements… as any fiduciary should. However, the permanence of the rule on June 9th still doesn’t mean the fighting over DoL fiduciary is done yet!
(kitcesnerdseyeview~Despite-No-More-Delay-DoL-Fiduciary-Still-Not-A-Done-Deal-Yet/ )