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DOL Fiduciary News: September 22, 2016

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Selling annuities under the DOL fiduciary rule is a whole new ballgame

InvestmentNews; Sep 21, 2016 @ 1:20 pm

The Department of Labor's fiduciary rule will fundamentally change the way brokers can select annuities for clients.

Brokers are currently able to sell annuities under a suitability standard, but fiduciary experts describe new DOL requirements as a suitability standard on steroids that will require a comprehensive client analysis similar to one performed by a traditional financial planner.

“The focus of the fiduciary rule is to compensate people for planning, not for product sales,” Jamie Hopkins, a professor in the retirement income program at The American College of Financial Services, said. “So that's the big change.”

DOL fiduciary rule to cost the securities industry $11B by 2020: study

InvestmentNews; Sep 21, 2016 @ 3:35 pm

Implementing the Department of Labor's new fiduciary rule for retirement accounts will cost the brokerage industry $11 billion in revenue over the next four years, according to a recent study from A.T. Kearney, a consultant.

Hardest hit will be independent broker-dealers, who stand to lose $4 billion in revenue, or 22%, of the industry's total, according to the study, which was released in August. IBDs are also expected to see a decline of $350 billion in client assets, or 11% of the industry's total.

Kansas Judge Hears Lawsuit Seeking to Throw Out DOL Rule

InsuranceNewsNet; September 21, 2016

U.S. District Court Judge Daniel Crabtree heard testimony for about 3.5 hours today on Market Synergy Group's lawsuit challenging the Department of Labor's controversial fiduciary rule.

According to a source who sat in on the hearing, the proceedings went smoother for the plaintiffs than did the Aug. 25 hearing in District of Columbia District Court. In that hearing, Judge Randolph J. Moss aggressively questioned Phillip D. Bartz, attorney for the National Association for Fixed Annuities.

Jackson Launches Perspective AdvisorySM 

September 21, 2016 10:30 AM EDT

DENVER -- (BUSINESS WIRE) -- Jackson National Life Insurance Company® today announced the launch of Perspective Advisory, the company’s first fee-based variable annuity. Perspective Advisory offers the same investments and optional benefits, for an additional charge, as Perspective II®, Jackson’s flagship commission-based variable annuity.

Greg Cicotte, executive vice president and chief distribution officer for Jackson, said the company’s entrance into the fee-based space is designed to meet increased market demand for products compatible with fee-based accounts and platforms as a result of the U.S. Department of Labor (DOL) fiduciary rules, released in April 2016.  

IRI Announces Market Compensation Survey in Partnership with Milliman

September 21, 2016

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) today announced that it will conduct a survey of compensation practices regarding sales of annuities and other investment products. The results of this survey will support efforts by financial services firms and financial professionals to comply with the reasonable compensation standard under the Department of Labor’s (DOL) fiduciary rule. IRI is partnering with Milliman, Inc. on this initiative.

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