DOL Fiduciary Update - 60 Day Delay Proposed by DOL

Discussion in 'Annuities Forum' started by scagnt83, Mar 1, 2017.

  1. scagnt83
    Offline

    scagnt83 Well-Known Member

    Posts:
    6,527
    Likes Received:
    30
    State:
    South Carolina
    https://www.forbes.com/sites/jamieh...l-moves-to-delay-fiduciary-rule/#179d1fe343e5

    DOL announced today that they plan to implement a 60 day delay to the new Fiduciary Regs. This will be an actual amendment to the law, and entered in the Federal Register. Only a 15 day comment period.

    Trump ordered the DOL to evaluate the law and "rescind or revise" the law accordingly.

    Congress is also currently working on proposed updates to Fiduciary Regs surrounding Qualified Plans.

    Hopefully they will work on gaining a consensus between the DOL/SEC/FINRA/ERISA. Because as it currently stands, all 4 have different definitions and regs pertaining to Fiduciary Advice.
     
  2. Brian Anderson
    Offline

    Brian Anderson Moderator Moderator

    Posts:
    535
    Likes Received:
    4
    State:
    Colorado
  3. DHK
    Offline

    DHK Well-Known Member

    Posts:
    6,084
    Likes Received:
    27
    State:
    California
    http://www.investmentnews.com/artic...sumer-faqs-on-fiduciary-rule-from-its-website

     
  4. nylife11023
    Offline

    nylife11023 Well-Known Member

    Posts:
    315
    Likes Received:
    0
    State:
     
    Not surprised about the delay. The idea that financial advisors should be forced by law to only work his his or her client's best interest as a fiduciary is obviously a really bad idea.

    The concept of giving consumers the power to sue in court those advisors who work in their own self-interest is an even worse idea, one that should never see the light of day.

    After all, this country was built on the time honored principles of caveat emptor and thus should it always be.

    Indeed, we're making America great again.
     
  5. DHK
    Offline

    DHK Well-Known Member

    Posts:
    6,084
    Likes Received:
    27
    State:
    California
    The biggest problem(s) I have with the Fiduciary ruling is:
    1) Requiring a financial institution to 'sign off' of every transaction when you're an insurance-only agent.
    2) Compensation disclosure (which is separate from costs incurred in the product/service).

    I'd prefer a "professional" standard that is above the "not unsuitable" rules we have now, but not quite as stringent as the DOL fiduciary rule.

    ----------

    Consumers have ALWAYS had the power to sue for reparations if they feel they have been harmed by an advisor or agent's advice.

    That's why we have E&O... although it does not cover fraud allegations.
     
  6. nylife11023
    Offline

    nylife11023 Well-Known Member

    Posts:
    315
    Likes Received:
    0
    State:
     
    Historically it has been very difficult for a consumer to win a case based on the suitability standard. The industry knows this and wants to keep it that way.

    It is easier to prove (win) a case based on the fiduciary standard since it is far more 'exacting' and 'specific' than suitability. The industry knows this also... and wants to avoid it if they possibility can.

    And given who is in the White House and the Congress... I don't think the industry has much to worry about.
     
  7. DHK
    Offline

    DHK Well-Known Member

    Posts:
    6,084
    Likes Received:
    27
    State:
    California
    Well, 'historically', it was always easier for the firm and the rep to settle with the client and "make the client whole"... if we're talking about a FINRA registered rep. That works a LOT, when the rep's notes aren't complete or there was gross negligence.
     
  8. walthamny
    Offline

    walthamny Well-Known Member

    Posts:
    376
    Likes Received:
    2
    State:
    Massachusetts
    It took 5.5 years to pass the DOL rule. Now the republicans don't have enough votes to repeal it in the senate. So they can delay and delay and delay but also also at the same time argue in court that 5.5 is such an insufficient time to review the law. Legally that wont work.

    They can re-open the law but that means new hearings, all parties will re-start and I don't see any reason for that to conclude in the next 2 years.

    It would be much easier to pass an amendment to the DOL rule. One that might pass is the class action part. If republicans can get 7 Democratic senators to stripping out the class action requirement that could pass. It is more of a political question now, whats in it for the Democrats to be nice to republicans right now. Republicans would have to give liberals something they can not refuse.

    So expect a delay in the DOL rule and may be one more delay and then it will go into effect. If there is an amendment it wont be that big.

    We already know there is a limit to executive orders, Trump's insurance advisor and his good friend Tony Robbins both support the DOL rule so don't expect this rule to change too much in 2017.

    More political capital will be spent on healthcare and taxes then this in 2017.
     
  9. Brian Anderson
    Offline

    Brian Anderson Moderator Moderator

    Posts:
    535
    Likes Received:
    4
    State:
    Colorado
    The DOL just released a delay measure today which officially postpones implementation of the fiduciary rule from April 10 until June 9. The delay measure will be published in the Federal Register this Friday, April 7.

    Actual implementation of the rule on June 9 still remains a longshot, of course – today a stopgap measure preventing implementation originally scheduled for Monday. The DOL is still “reviewing” the rule following President Trump’s Feb. 3 directive that is expected to lead to its modification or outright repeal.

    https://s3.amazonaws.com/public-inspection.federalregister.gov/2017-06914.pdf

    ----------

    Insured Retirement Institute's statement on the delay:

    WASHINGTON, D.C. – The Insured Retirement Institute (IRI) today issued a statement from CEO and President, Cathy Weatherford, in response to the Department of Labor’s issuance of a 60-day delay of the applicability date of the fiduciary rule.

    “The Insured Retirement Institute is pleased that the Department of Labor (DOL) acted expeditiously to issue a 60-day delay of the applicability date and a delay until January 1, 2018, for a number of provisions of the fiduciary rule which would significantly harm retirement savers by limiting access to financial guidance, reducing service provider choice and products, and raising the cost of saving for retirement.”

    “The delays provided by the DOL are necessary to give the appropriate time needed to conduct the examination the President directed—which reflects IRI’s well-found, ongoing, and significant concerns about the rule. However, IRI is disappointed to see that the Department did not delay all the provisions of the rule. The President directed the Department to examine all questions of law and policy raised by the rule, the potential harm that could be caused to retirement savers, as well as potential market disruptions that could occur from the Department’s failure to delay all the provisions of the rule.”

    “We are hopeful that a delay to at least January 1, 2018, of all the provisions will be granted expeditiously following the closing of the comment period on April 17, 2017. Without a delay of the additional provisions of the rule set to take effect on June 9, 2017, the Department will not be able to properly assess the harm caused to the retirement savers and the financial services firms that serve them.”
     
  10. Brian Anderson
    Offline

    Brian Anderson Moderator Moderator

    Posts:
    535
    Likes Received:
    4
    State:
    Colorado
    We’re about 3 weeks out from the significantly expanded fiduciary definition and the impartial conduct standards of the DOL Rule taking effect – set for June 9 unless another delay happens.

    With Trump immersed in just a few other issues at the moment, how confident are you that new Labor Secretary Alexander Acosta will step in with another delay before June 9?

    Posted a new article on the topic here…

    Insurance Forums | FINRA Chair: Even if Trump repeals Fiduciary Rule, it has already reshaped industry
     
Loading...

Share This Page