Skip to content

DOL Fiduciary News: May 9, 2017

Please Note:

These links will take you directly to the homepage of the website that features the article.

To reach the article directly, copy and paste the article title into the search feature on the homepage of the publication website.



Morgan Stanley's decision to cut Vanguard funds likely due to DOL fiduciary rule

InvestmentNews; May 8, 2017 @ 1:40 pm

Morgan Stanley's decision to eliminate new sales of Vanguard Group mutual funds appears to reduce a potential conflict under the Department of Labor's fiduciary rule.

Vanguard does not pay brokerage firms like Morgan Stanley for distribution, a practice that is commonly called paying for shelf space in the brokerage industry. Asset managers can pony up tens or hundreds of thousands of dollars to brokerage firms so their wholesalers can get in front of advisers. And that could have led to Morgan Stanley's decision to cut Vanguard funds, according to industry observers.

"It's possible Morgan Stanley did it because Vanguard is not paying for shelf space, but the company has to treat everyone the same now" because of the DOL's rule, said one Morgan Stanley adviser, who declined to be named and said he did not have any direct insight into the firm's thinking
(http://www.investmentnews.com)

New share classes could ease investor fears as DOL changes near

SNL.com; Monday, May 08, 2017 5:43 PM ET

As a June applicability date for the Department of Labor's Conflict of Interest Rule nears, the comprehensive rule changes have been accompanied by a great deal of uncertainty, according to industry experts.

Panelists speaking at the recent Morningstar Investment Conference in Chicago agreed that the rule will likely survive in some form after a 60-day delay imposed by President Donald Trump's administration in early April. Weeks earlier, Trump directed the department to conduct a review of the Best Interest Contract Exemption, an enforcement mechanism now set to take effect Jan. 1, 2018. The exemption is designed to address various conflict-of-interest issues that may arise from payments that advisers receive for dispensing advice to their clients regarding individual retirement accounts or other retirement plans.
(https://www.snl.com)

NAFA Launches Campaign to Stop DOL Fiduciary Rule

ThinkAdvisor; May 8, 2017

The National Association for Fixed Annuities has launched a grassroots campaign to appeal directly to the Trump administration as well as to Labor Secretary R. Alexander Acosta to stop the Department of Labor’s fiduciary rule from taking effect on June 9.

“We want the administration to understand the disappointment and anxiety being felt by our membership, which thought President Trump would never allow such a far-reaching excessive regulation to get this far,” said NAFA Executive Director Chip Anderson in a Monday statement announcing the initiative.
(http://www.thinkadvisor.com)