DOL Fiduciary News: October 7, 2016
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Merrill Lynch eliminates commission IRA business in response to DOL fiduciary rule
InvestmentNews; Oct 6, 2016 @ 5:51 pm
In a signal of the radical change the brokerage industry is set to undergo because of the Labor Department's fiduciary rule, Merrill Lynch has announced it will no longer offer new, advised commission-based IRAs starting next year.
For the wirehouse's 14,000 advisers, new retail retirement accounts will exist in a fee-based environment as of April 10, 2017, the implementation date of the Department of Labor regulation.
Two Definitions of 'Best Interest'
Retirement Income Journal (commentary); Thu, Oct 06, 2016
By Kerry Pechter
More and more frequently, I catch myself stewing about retirement income—my own. For starters, I plan to work until age 70 if I can and postpone claiming Social Security until then. That’s mainly for my family’s sake.
My spouse is six years younger than I am, and I want her to qualify for the largest possible widow’s benefit. A back-loaded Social Security payment should help ease the pressure she might feel to spend our kids’ inheritance.
DOL Rule Appeals Likely to Drag Well into ’17
InsuranceNewsNet; October 6, 2016
As the financial services industry eagerly awaits decisions from the bench, thoughts are turning to appeals in lawsuits filed against the Department of Labor's fiduciary rule.
The first lawsuit by the National Association for Fixed Annuities – requesting a preliminary injunction stopping the entire rule – was heard Aug. 25 in District of Columbia District Court. A decision is expected any day from Judge Randolph D. Moss.
Erin Sweeney, a Washington lawyer who is not involved in the case, said she expects Moss' decision will be appealed. Even in the best-case scenario, that could drag the case out well into 2017.
Fiduciary Rule to Lead to Changes in DC Plan Investment Lineups
PLANSPONSOR.COM | October 06, 2016
The U.S. Department of Labor’s (DOL)’s conflict of interest rule, or fiduciary rule, will cause a surge in mutual funds being reviewed and replaced in employer-sponsored defined contribution (DC) retirement plans, according to a survey by Ignites Retirement Research. This Financial Times service notes changes are being made even before the January 1, 2018, deadline for full compliance.
One-third of financial advisers who counsel DC plans already plan to make changes to mutual funds used in their clients’ DC plans in 2017. Another 9% are likely to make such changes. More than half (55%) of the DC plan advisers surveyed by Ignites Retirement Research either plan to, or are very likely to review the mutual funds used in client DC plans before the fiduciary rule takes effect.