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DOL Fiduciary News: March 3, 2017

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'As of Today,' April 10 Is DOL Fiduciary Compliance Date: Attorney

ThinkAdvisor; March 2, 2017

Despite the Department of Labor proposing a 60-day delay to its fiduciary rule, “as of today, April 10 is the applicability date,” Dan Kleinman, partner at Morgan Lewis & Bockius in Washington, said Thursday.

That being said, what chance is there that April 10 will not be the compliance date? “I think it’s high 80% to 90% that we will get to that [April 10] date and the rule won’t be applicable,” Kleinman said at the Investment Adviser Association’s annual compliance conference in Washington.

SEC’s Piwowar: Obama-Era Retirement-Savings Rule Boon for Trial Lawyers 

The Wall Street Journal; March 2, 2017 12:11 p.m. ET

WASHINGTON—The acting head of the Securities and Exchange Commission blasted a regulation opposed by stockbrokers and the Trump administration, saying the rule was written to “increase profits” for trial lawyers.

Michael Piwowar Thursday added his voice to a strident debate over the future of the retirement-savings regulation known as the “fiduciary” rule. The Labor Department plans to delay the rule by 60 days, setting the stage for its repeal or considerable revision.

Mr. Piwowar said the rule was “highly political” and was “never about investor protection.”

DOL ‘relief’ would kill small annuity marketers, groups say; March 2, 2017

An Obama administration offer to put an air hole for indexed annuity marketing firms in its fiduciary rule is a sham, insurance industry groups argue.

The administration's proposed exemption for independent marketing organizations is so narrow that it would let most suffocate, the groups say in comment letters sent to the Employee Benefits Security Administration.

Charles Anderson, executive director of the Washington-based National Association for Fixed Annuities, says a minimum size requirement included in the proposal would probably shut out most of the 200 or so major IMOs directly affected by the proposal.

Voya CEO: DOL rule or no rule, it’s time to upgrade your game; March 2, 2017

Whether or not the Department of Labor’s now delayed fiduciary rule goes into effect, this much seems evident: Agents and advisors are increasingly migrating from commissions on product sales to a fee-based investment advisor model that engenders holistic planning, acting in the client’s interest and, thus, adherence to aspects of the rule.

Why the shift? Because adoption of a fee-based advisory model, by bringing greater trust and professionalism to the client relationship, is ultimately good for business.

This was an overarching theme of remarks by Carolyn Johnson, chief executive officer of annuities and individual life at Voya Financial. Over a nearly 50-minute phone interview with LifeHealthPro, Johnson shared her thoughts on the direction of protection and retirement plan products, prospects for life insurance and annuity sales amid changing market dynamics, and innovative initiatives underway within Voya’s business units.

Fee-Based FIAs Are Customer-Friendly. But Will They Sell?

Retirement Income Journal; Thu, Mar 02, 2017

Let’s consider the relatively new phenomenon of no-commission fixed indexed annuities (FIAs). These products potentially create significantly more value for investors than traditional FIAs. But it’s not clear if they will prove popular with the people who sell them.

How much more customer value can they deliver? Joe Maringer, national sales vice president at Great American Life, told RIJ, “A good rule of thumb is that there’s approximately a 40% to 50% higher cap [on the no-commission product]. “So if the cap were 4% on our commission product, it would be 6% on our advisory product. Today we have caps on the S&P 500 Index of 7.25% and on REIT Index, 8.25%” on the firm's no-commission Index Protector 7.

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