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DOL Fiduciary News: June 8, 2017

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U.S. Labor Department takes steps to reconsider fiduciary rule

Reuters; Wed Jun 7, 2017 | 4:22pm EDT

WASHINGTON -- The U.S. Labor Department this week took preliminary steps toward potentially recrafting the fiduciary rule, which requires brokers who offer retirement advice to act in their customers' best interest.

The White House's Office of Management and Budget website posted a notice ( by the Labor Department saying it plans to solicit information from the public and other interested parties about the rule.

Such a step marks the very early part of a formal rulemaking process. However, it does not guarantee a new rule will ultimately be crafted.

DOL fiduciary rule: Edward Jones changing stance on mutual fund commissions in IRAs

InvestmentNews; June 7, 2017 @ 2:29 pm

Edward Jones is reconsidering its ban on mutual fund commissions in individual retirement accounts under the Department of Labor fiduciary rule, and hopes to roll out a new account option by midsummer that would allow advisers to use such investments with clients in brokerage IRAs.

Edward Jones, which houses 15,000 advisers, last summer indicated it would disallow advisers from selling mutual funds on commission after the fiduciary rule took effect, absent more consistent pricing for products among asset managers. However, citing "additional flexibility granted by the Department of Labor," the firm is changing its stance, at the same time the Trump administration is beginning a review of the rule, which raises investment-advice standards in retirement accounts.

Nationwide helps advisors prepare for first phase of Department of Labor rule 

COLUMBUS, Ohio, June 7, 2017 /PRNewswire/ -- As the first phase of the Department of Labor's (DOL) Conflict of Interest Rule goes into effect this week, the Nationwide Retirement Institute® is providing resources and support to help advisors incorporate a best interest process with clients.

"Nationwide's goal is to break down and simplify this complex issue so advisors can focus their attention on building client relationships," said Kevin McGarry, director of the Nationwide Retirement Institute. "We've been working on making this transition as easy as possible, because clients need help and advisors are seeking clarity on the rule." 

Starting June 9, those who give advice on investments within retirement accounts will be held to the Impartial Conduct Standards, which have three requirements:

  • Advice is in the best interest of the customer
  • Compensation is reasonable
  • Statements about investment transactions, compensation and conflicts of interest are not misleading


How much will reasonable compensation be come June 9?; June 9, 2017

Come midnight this Friday, anyone advising IRA account holders, and most of the country’s 401(k) plans, will have to operate under the fiduciary rule’s impartial conduct standards.

The June 9 requirement is, of course, a far cry from compliance with the full rule, which is scheduled for January 1, 2018.

The impartial conduct standards require that advice is given in the best interest of investors. Advisors can only receive reasonable compensation and are prohibited from giving investors misleading information.

The fiduciary rule’s private right of action, which gives investors recourse through class-action claims, will not apply until the beginning of next year. The Labor Department has underscored that its focus during the transition period will be on compliance and not enforcement.

Investment Adviser Association members take complaints about DOL fiduciary rule to Capitol Hill

InvestmentNews; June 7, 2017 @ 2:01 pm

Members of the Investment Adviser Association took their complaints about the Labor Department fiduciary rule to Capitol Hill on Wednesday.

Wes Burnett, president and chief executive of Optifour Integrated Wealth Management, said that the DOL rule, which requires advisers to act in the best interests of their clients in retirement accounts, "confuses" his clients because it only applies to some investments and "it will be duplicating what I already do." As an investment adviser, he is held to a fiduciary standard when providing advice.

Planners Fear Unintended Consequences as DOL Rule Compliance Date Nears

ThinkAdvisor; June 6, 2017

As the industry braces for the Friday deadline for compliance with the Department of Labor's fiduciary rule, words of advice, caution and frustration are emerging from advisors as well as ERISA attorneys.

Meanwhile, the judge overseeing the appeal brought by the nine groups in their case against the fiduciary rule in a Texas court agreed to expedite the hearing, with the appeal to be heard either in late July or the first week of August. The groups appealing include the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Financial Services Institute.

Robert Schmansky, a fee-only planner with Clear Financial Advisors in Lovania, Michigan, told ThinkAdvisor on Tuesday that he believes Labor’s fiduciary rule “is going to harm the exact people it claims to help.”

DOL Ruling: Now that Investors Know They Want to Work with a Fiduciary

June 08, 2017 08:00 AM Eastern Daylight Time

CAMBRIDGE, Mass. -- (BUSINESS WIRE) -- With trust in the financial industry among investors at an all-time low (32%), the DOL fiduciary rule may be a surprising savior to many financial advisors (FAs) and asset managers. These and other findings are from Cogent Beat™ Investor, the online investor portal from Cogent Reports™ at Market Strategies International.

The delay of the DOL fiduciary rule has significantly increased investor awareness of the debate (36%, up from 27% in January), and consequently, three in four (73%) investors familiar with the ruling state that they would want to work with an FA that is a fiduciary. Additionally, advisors stand to gain from the rule as well, because 27% of affluent investors who were made aware of the rule have said their perception of their advisor has improved.

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