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DOL Fiduciary News: November 1, 2016

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What is clear from DOL's fiduciary FAQs — and what requires more guidance

InvestmentNews; Oct 31, 2016 @ 1:54 pm

The first round of frequently asked questions from the Labor Department for a regulation that raises investment advice standards for retirement accounts is a combination of prescription and general guidance.

The DOL tends to like investment advice that is paid for by fees on assets, but provides safe harbors for the brokerage model. It offers some specific direction for pay-incentive structures, but declines to define reasonable compensation.

DOL Gives Guidance to RIAs on Rollovers

Financial Advisor; OCTOBER 31, 2016

The U.S. Department of Labor has provided guidance on how fee-based RIAs can use the “level-fee” exemption to recommend IRA rollovers under the DOL’s fiduciary rule for retirement accounts.

The level-fee exemption is a streamlined provision within the full best-interest contract (BIC) exemption. It is designed primarily to provide relief for rollover recommendations made by advisors who charge asset-based or retention fees.

W.P. Carey's Goldberg straightens out adviser misconceptions about DOL fiduciary rule

InvestmentNews; Oct 31, 2016 @ 12:42 pm

Mark Goldberg, president of investment management at W.P. Carey Inc., has been listening for months to financial advisers' worries about the Department of Labor's new fiduciary rule, which seeks to raise investment advice standards in retirement accounts. Mr. Goldberg — who is also chairman of its wholesaling broker-dealer, Carey Financial — knows of what he speaks: As chair of the Investment Program Association, he testified before the Department of Labor in 2015 about the rule, and later followed up with the DOL in two separate meeting.

And he knows the world of independent broker-dealers; last decade, before joining W.P. Carey, he was president and CEO of Royal Alliance Associates Inc., one of the broker-dealers that currently make up the Advisor Group.

Despite DOL Rule, Cetera Sticks with Commissions

Financial Advisor; OCTOBER 31, 2016

Cetera Financial Group is sticking with commissions – for now.

After Commonwealth Financial Network announced last week that it will cease offering commission-based products in IRAs and qualified retirement plans, Cetera has reassured its representatives via an internal memo that they can continue to receive commissions moving forward.

In an e-mail communication circulated on Monday and obtained by Financial Advisor through an industry source, the Los Angeles-based broker-dealer network told employees that “we have every intention of continuing to offer commission-based products, including mutual funds, in retirement accounts.”

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