DOL Fiduciary Rule Is ‘Biggest Change That We’ll Go Through’: Pershing

By Emily ZulzStaff Reporter@think_emilyz

NOVEMBER 23, 2015

The real impact of the new DOL fiduciary rule won't be felt immediately, Pershing’s John Brett says, but two to five years after it takes effect

"This way that securities have been sold here in the United States … fundamentally changes” once the rule goes through, Brett says.

Could the Department of Labor’s impending new fiduciary rule fundamentally change the industry as it is today?

John Brett, managing director and member of the executive committee for Pershing LLC, a BNY Mellon company, believes the industry is on the cusp of one of the biggest changes it has seen.

The Impact of the DOL’s Fiduciary Proposal on Sales of Insurance Products

Posted on July 9, 2015, by Fred Reish in DOL Activityfiduciaryprohibited transactionComments Off on The Impact of the DOL’s Fiduciary Proposal on Sales of Insurance Products

This client alert, written by Fred Reish, Bruce Ashton, Brad Campbell, Joan Neri, and Josh Waldbeser, from the Drinker Biddle Employee Benefits and Executive Compensation Group, states our conclusions about the impact of the Department of Labor (DOL) proposal to expand the definition of fiduciary investment advice and to modify prohibited transaction (PT) exemptions on sales of insurance products to plans, participants and IRAs.

The proposal affects insurance agents, insurance brokers and pension consultants who receive commissions for selling insurance or annuity contracts to plans and IRAs. (We refer to them collectively as “Insurance Advisors.”) The DOL’s proposal materially expands the definition of fiduciary investment advice to include common investment sales practices. As a result, we use “sales” in this Alert to refer to fiduciary recommendations of insurance products.

Here are our conclusions along with the link to our more in-depth analysis:

  • Conclusion No. 1: PT relief for the receipt of sales commissions has been available under Prohibited Transaction Exemption (PTE) 84-24 for sales by “fiduciary” Insurance Advisors of fixed and variable insurance products to plans and IRAs, and this will continue (but with some changes).  Under the proposal, the PTE will continue to be available for sales of fixed and variable products to plans and participants, and for sales of fixed annuity products to IRAs. (By “fixed,” we mean insurance products that are not treated as securities.) However, for IRAs 84-24 relief will not be available for insurance products that are treated as securities under federal securities laws “annuity securities”).  To satisfy the conditions of the exemption, the Insurance Advisor and the insurance company would need, among other things, to comply with “Impartial Conduct Standards.”  That is, they would need to act in the best interest of the plan, participant or IRA in making recommendations.  Also, Insurance Advisors and their affiliates would not be able to receive revenue sharing, administrative and marketing fees.  
  • Conclusion No. 2: Under the expanded re-definition of fiduciary, recommending a distribution or rollover or making recommendations about the investment of property to be distributed or rolled over also constitutes fiduciary investment advice.  As a result, Insurance Advisors making these recommendations would be considered fiduciaries, would be subject to the ERISA PT rules, and would need exemptive relief to avoid the adverse consequences of a PT.
  • Conclusion No. 3: The exemption for sales of insurance products that are securities under federal securities laws, such as variable annuities, was transferred to the proposed “Best Interest Contract Exemption” or “BICE,” which has a number of new and difficult conditions.

DOL Fiduciary Rule Could Complicate Rollovers for RIAs

By Bernice NapachSenior WriterThinkAdvisor@Think_Napach

A warning to RIAs: Think the DOL fiduciary rule won't affect you, since you're already a fiduciary? Think again

Sometime next year, the Department of Labor will more than likely issue its final rule on the fiduciary requirements for financial advisors focused on eliminating conflicts of interest. While much of the response – and opposition – to the proposed rule has come from advisors who are not currently fiduciaries, the rule could also impact RIAs, who are fiduciaries as defined by the Securities and Exchange Commission.

6 Ways to Target Your Client Base


Most financial advisors know the basics of running a profitable business: Create a niche and know your value proposition. But when it comes to actually doing those things, many don't know where to start.

Practice management experts Joni Youngwirth, Commonwealth Financial Network's managing principal for practice management, Fidelity Investments' executive vice president David Canter and Christine Gaze, president of Purpose Consulting Group spoke to Financial Planning, offering a number of actionable tips for running a well-oiled practice:

Is Your Practice Getting Bigger or Less Small?

We talk often about the difference between a practice and a business. For our purposes a practice is a profitable endeavor that requires your participation. A business is an endeavor which will serve clients profitably whether you are working in it or not. Here is the test: Suppose you take a year off to travel abroad with your spouse or significant other and check in once a quarter, to check the metrics of your employees and your balance sheet. Would you have a business when you returned from Tahiti or a Greek Island? If you will, and especially if it would have grown, congratulations! You have a business. If not, you have a practice.

How Advisors Can Grow and Engage Their Client Base

Advisors today are seemingly tasked with a host of responsibilities — discussing clients’ investment goals, monitoring their investment strategies, tracking the market and adjusting portfolio allocations. Some wealth managers can be so challenged with work, that it strains the way they engage their clients:

The following tips, offered by financial planners and industry experts, may help advisors overcome some of biggest challenges to client engagement. 

1.      Marketing and prospecting

David R. Lee, director of practice intelligence at Raymond James Financial, says the best way advisors can prospect today is to center their search on “centers of influence.”

“Make time to spend with people you like [both clients and centers of influence],” says Lee, a member of the education team who has helped train hundreds of Raymond James’ advisors. “These are the sources of your best clients. Look for COIs who fit with your personality, want to grow their businesses and offer reciprocity potential.”

Wealth manager Jennifer Landon, founder-president of Journey Financial Services of Idaho Falls, Idaho, recommends advisors create opportunities to get in front of client prospects, such as holding educational events on topical events —  for example, preventing identity theft, creative Social Security strategies and market updates.

2.      Balancing the art of being a money manager and a relationship builder

To meet this challenge, Lee suggests advisors leverage their time efficiently. “One way,” he says, is to develop a “consistent and repeatable investment process and move clients into it, while delegating or eliminating those things keeping you from the most valuable use of your time [being with clients and prospects].”  

Another approach is to outsource some tasks, such as billing and record keeping, which will allow more time to build upon and develop new client relationships, says Nate Lucius, managing director at Gradient Investments, based in Arden Hills, Minn.   

3.      Staying engaged with clients and delivering consistent updates

“A monthly newsletter alone will not suffice,” says Lucius. “Clients should be able to access online tools or portals that can help them feel more in control of their financial life.”

He recommends holding monthly educational dinners or lunches at a local restaurant or in your office. Quarterly client calls are another way to stay tuned in with clients.

“We particularly like video updates because our clients find value in them and they’re easy to forward to a friend,” says Journey Financial's Landon. 

Charlie Harriman, a financial advisor at Cloud Financial Inc., a financial advisory firm with several offices in Alabama, often holds informal gatherings with clients. Events have included a “client appreciation” dinner, BBQs, a cookout at a shooting range, a movie night, a paper-shredding night, golf tournaments and luncheons.

“These events are not related to financial topics,” says Harriman. “Rather, they allow us to interact with clients in a social setting.”

Bruce W. Fraser, a New York financial writer, contributes to Financial Planning and On Wallstreet

Work ON your business; not just IN it

We are constantly trying to encourage advisor/owners to treat their business as such, rather than as a practice.  The following article talks about many of the concepts that we speak about in our public forums and at conferences. Always keep in mind that you have something that can be more than just a paycheck. It can and is an actively managed investment in your time, your money, and in your family's future. CMC

Bill to Halt DOL Fiduciary Rule Passes House Panel

The following article appeared today in, the online Magazine. It is obviously a positive step when someone in Congress is trying to add common sense to the process. However, we are not ready to pop the champagne cork and declare victory. President Obama and Sec Perez are committed to this rule, and while there is some indication that they may grant some concessions to the thousands of advisors and industry lobbyists, like FSI who have commented, there is no doubt that they want something in place before the Administration leaves office. It is also equally clear that your life as an advisor will be more onerous, 

DOL May Make Changes Due to Advisor Feedback

In an article released today in Investment News, Timothy Hauser, the deputy assistant secretary of labor says that the DOL has listened to the thousands of advisors and industry groups on some of the most contentious issues surrounding the proposed regulations on fiduciary rules and how advisors are able to give advice to 401k and IRA participants. I suggest you read the article: via @newsfromIN

Keep up with the DOL's proposed regs here and in the news as this will quite possibly change the 

Are You a Fiduciary? The DOL says you better be!

If you have been following the proposed regulations by the current Department of Labor, you know that the DOL is going after our industry in a concerted manner. The latest video on their site, essentially says to investors, that unless your financial advisor is a fiduciary, he or she is not looking out for you. ( 

In one of those cute videos with the person drawing as the narrator tells a story, the message is that advisors are just out for themselves and trying to earn trips to Hawaii and selling you things that line their pockets. Please pay attention! There have always been attacks such as this, but we are hearing