On April 7, the U.S. Department of Labor (DOL) will likely publish an official delay of its fiduciary and conflicts of interest rule. Many in our industry have been waiting for this rule to be delayed, but several points around the fiduciary rule remain uncertain. Industry experts predict a further delay, allowing the DOL to fully complete President Trump’s requested review of the rule.
I want to stress to all who work in our industry that many aspects of the rule will go into effect June 9, 2017. Most notably, impartial conduct standards must be adhered to on any qualified sale after the delayed implementation date. Although the Best Interest Contract (BIC) requirement appears to be have been pushed off until Jan. 1, 2018, the sale of an annuity inside a qualified account must be in the best interest of the client, make no misleading statements, and have reasonable compensation tied to the transaction.
More importantly, our industry has already begun to shift to the fiduciary status and will continue to do so before the June 9 delayed implementation date. For those of us serving our clients, it continues to be table stakes to work in the best interest of our clients. We must work toward the standard of care that every client deserves while protecting our profession that serves those clients.
Even with the relief of the BIC through 2017, we need to look at the next nine months as an opportunity to evolve in the fiduciary world. We must continue to evaluate our sales process, our product shelves, and our holistic nature of our clients’ needs. The successful retirement advisor of the future will get to the fiduciary standard quicker, more efficiently, and have greater effectiveness with each client.
Ash Brokerage stands committed to helping all our advisors make this transition. As implementation grows clearer in the coming weeks and months, we will announce several tools and resources to help you.
Many aspects of the rule remain unanswered. Namely, the independent marketing organization exemption continues through the review process without finalized thresholds for marketing organizations to sign the BIC in 2018. We look forward to continuing to be part of the conversation in shaping these important changes to our industry. Look for continued information through Ash’s sales teams and social media. I look forward to growth in our industry with the increased care that the rule will provide to our clients.
Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of annuities at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”
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