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DOL Fiduciary News: October 17, 2016

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Merrill Lynch gives insight to how firms may treat trail commissions post-DOL fiduciary rule

InvestmentNews; Oct 14, 2016 @ 9:00 am

Following Merrill Lynch's announcement last week that it would eliminate its commission IRA business when the Labor Department's fiduciary rule goes into effect next year, observers may be wondering: What will happen to trailing commissions on already-established brokerage retirement accounts?

Merrill brokers will only be able to keep their trail commissions on grandfathered accounts, or those clients who remain in a Merrill IRA brokerage account existing before April 10 next year, the implementation date for the regulation, according to a company spokeswoman.

How should advisers defend against DoL fiduciary litigation?

Financial Planning; October 13, 2016, 5:31pm EDT

Now is the time for advisers to take a hard look at their compliance program with an eye toward bullet-proofing their practice against potential litigation after the Department of Labor's new fiduciary rule, legal and compliance experts caution.

The DoL's rule, with a compliance date of April 2017, expands the fiduciary responsibilities for advisers and brokers working with retirement savers and plans, and lays out contractual provisions that would enable clients to sue their financial professionals over a potential breach of fiduciary duty. The DoL is currently defending its fiduciary regulation against a series of lawsuits seeking to overturn the rule.

Dos and Don’ts of Seminar Selling Under DOL Rule

InsuranceNewsNet; October 14, 2016

Agents who have long relied on free seminars and steak dinners to educate prospective clients will have to tread lightly once the Department of Labor fiduciary rules take effect.

. . . Most of the concern and study over the past year has focused on the impact of the DOL rule on agent compensation. DOL officials say rampant conflicts exist when advisors and agents are paid higher commissions to recommend certain products.

Lesser attention is being paid to how the rules will affect the definitions of “education” and “advice.” Where lines were blurred in the past, they will now be more black and white. Or at least the new path to litigation will make it seem that way.

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