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DOL Fiduciary News: September 13, 2016

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A.M. Best Special Report: Variable Annuity Sales Decrease Amid Regulatory Changes

Best's News Service via Bestwire -- September 12, 2016 03:06 PM

Oldwick -- Marketplace demand for variable annuities (VA) continues as individuals approaching retirement age look for savings vehicles to help manage their long-term needs, according to A.M. Best. However, the continued low interest rate environment and recent equity market volatility have pressured policyholders’ VA returns. This has also pressured insurers’ ability to manage large blocks of in-force VA business, many of which have richer guarantees than are currently underwritten, according to a new Best’s Special Report, titled, “Variable Annuity Sales Decrease Amid Regulatory Changes.”

State Farm, citing DOL fiduciary rule, cuts agents from mutual fund and variable annuity sales

InvestmentNews; Sep 12, 2016 @ 1:49 pm

State Farm is changing the way the company and its agents handle some retail retirement accounts in response to a new Labor Department regulation that ups the standard of investment advice retirement savers receive.

Beginning in April 2017, when the Department of Labor rule comes into effect, State Farm will only sell and service mutual funds, variable products and tax-qualified bank deposit products through a self-directed customer call center, according to spokeswoman Rachael Risinger.

. . . State Farm's decision affects 12,000 State Farm agents around the country licensed to sell securities, two-thirds of the company's 18,000 total agents.

Fiduciary countdown: Firms are in 'escalation time' 

On Wall Street; September 08 2016, 12:26pm EDT

Accelerating software launches, printing educational materials and hiring new staff: These are just a few measures brokerage firms are taking — quickly — to ready themselves to implement the Department of Labor’s fiduciary rule.

"Now we are in a real focused escalation time where we are giving advisers specific directions on what they can do to prepare," says Andrew Crowell, vice chairman of D.A. Davidson's Individual Investor Group. "Post Labor Day, we will be providing them with firm-based and third party solutions."

Kathy Gremillion, head of Fiduciary Strategies at RBC Wealth Management-U.S., a position created in June, says the firm has accelerated its planned launch of new financial planning software to October or November. RBC views having a more comprehensive tool in the hands of advisors as critical, she says.

SEC Chairwoman Mary Jo White says agency mulling fiduciary duty

InvestmentNews; Sep 12, 2016 @ 2:07 pm

Securities and Exchange Commission members are mulling a staff report on a potential rule to raise retail investment advice standards, but the agency is not any closer to taking action, SEC Chairwoman Mary Jo White said Monday.

“My fellow commissioners have a very detailed outline of the staff's thinking on specific recommendations,” Ms. White told an audience of state regulators at the North American Securities Administrators Association annual conference in Providence, R.I.

But she reiterated that a proposal is not imminent.

BNY Mellon's Pershing Adds Mesirow Financial to its Retirement Plan Network to Expand Fiduciary Offerings

JERSEY CITY, N.J., Sept. 12, 2016 /PRNewswire/ -- Pershing LLC, a BNY Mellon company, today announced that it has selected Mesirow Financial Investment Management, Inc. as a premier provider of fiduciary services for its open-architecture Retirement Plan Network. The addition of Mesirow Financial's fiduciary partnership services will provide plan advisors using the Retirement Plan Network access to a robust set of services to support them with the investment selection and monitoring provided to their plan sponsor clients.

Through the Retirement Plan Network, Mesirow will provide access to both 3(21) and 3(38) ERISA fiduciary services to support plan fiduciaries. Through the 3(21) service, Mesirow makes recommendations, gives guidance, and monitors investment options selected by the plan advisor and plan fiduciary. In the 3(38) service, Mesirow maintains full discretion over investment options for a plan: selecting, monitoring, and replacing investment options based on the plans investment policy statement.

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