DOL Fiduciary News: May 30, 2017
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DOL Looking for Reason to Delay Full Fiduciary Compliance Date: Lawyer
ThinkAdvisor; May 26, 2017
Full compliance with the DOL fiduciary rule, which begins to take effect June 9 following a two-month delay, isn’t required until Jan. 1, 2018, but that date could be postponed as well.
According its latest Q&A on the fiduciary rule, the Labor Department is currently analyzing issues raised in a presidential memorandum, which led to the two-month delay, and intends to issue a Request for Information (RFI) “in the near future” that will, among other things, ask for public comment on whether “an additional delay” beyond Jan. 1 is needed.
The RFI will ask whether another delay ”would allow for more effective retirement assistance” and help firms avoid “needless expenses as they build … compliance structures that may ultimately be unnecessary” because of the DOL’s final decision on the issues raised by the presidential memo.
DOL Fiduciary Deadline Is Coming. Here’s a Compliance Checklist
ThinkAdvisor; May 26, 2017
Now that the Department of Labor has confirmed that its fiduciary rule’s compliance date will kick in on June 9, compliance firms and attorneys are busy providing checklists to broker-dealers, advisors and plan sponsors on how to prepare.
“We actually think the current state of affairs makes the most sense” in that the FAQs guidance issued by Labor on May 22 requires a best interest standard “without specifically mandating how firms must comply,” said Cipperman Compliance Services in a Thursday commentary. “The Investment Advisers Act takes that approach, and it has worked pretty well since 1940.”
Wall Street May Get a New Chance to Gut Obama's Broker-Conflict Rule
Bloomberg; May 26, 2017, 1:11 PM EDT
The finance industry may get a fresh opportunity to chip away at an Obama-era rule that cracked down on Wall Street conflicts of interest, as the Securities and Exchange Commission is considering reviewing the responsibilities that brokers have to their clients.
The SEC’s first step could be seeking feedback on what’s known as a fiduciary duty – the requirement that financial professionals offering investment advice put their customers’ interests ahead of their own, said two people with knowledge of the matter who asked not to be named because the agency hasn’t announced its plans.
Fee pressure has RIAs considering moving from AUM to retainer model
InvestmentNews; May 26, 2017 @ 2:00 pm
As investors become increasingly cost conscious and more savvy about fees, some financial advisers claim to be poised to field any and all challenges by embracing a retainer-fee model.
Unlike the more popular model of charging clients based on assets under management, the retainer, or flat fee, structure places more emphasis on planning and less on investment performance. Retainer fees also allow advisers to work with younger clients and those who don't have a lot of assets.
"I have some clients without a lot of money, but they require a lot of work on the planning side, and on the flip side I have clients with a lot of money who don't need a lot of planning work, so it's not right to be charging based on assets," said Carolyn McClanahan, founder and director of financial planning at Life Planning Partners.