Displaying items by tag: SEC

Tuesday, 07 April 2020 15:26

SEC Holds Firm on Reg BI Compliance Date


Many brokers were hoping that the SEC might grant an extension of the deadline to be in compliance with the forthcoming Regulation Best Interest. Advisors must be in compliance with the rule by June 30th, a previously set date that SEC chief Jay Clayton just reiterated last week. The only reprieve the SEC granted was that the regulator would take “good faith efforts” into account in the initial phase.

FINSUM: Many hoped this deadline would be pushed back into the Fall, but the SEC is dead set on June 30th.

Published in Wealth Management


Advisors will have likely noticed that Massachusetts has just introduced a new fiduciary rule. The rule, announced on Friday, makes Massachusetts the first state to adopt a best interest standard since courts struck down the DOL’s fiduciary rule. The rule is under the usual attacks from industry trade groups, but more surprisingly, it is also being attacked by fiduciary rule advocates. Such advocates had initially praised the rule’s first draft, but now say the state made too many changes before implementation. According to the Consumer Federation of America “What’s left is a modest improvement on Regulation Best Interest but not the kind of tough standard needed to protect investors from conflicted advice.”

FINSUM: The changes to the rule were significant, such as not applying to insurance product sales and not applying to brokers unless “account monitoring” was specifically specified in the customer contract. The rule takes effect March 6th.

Published in Wealth Management
Thursday, 20 February 2020 10:36

DOL Rule 1.0 Might be Coming Back


The terrible, no-good, hated first version of the DOL Rule could be on its way back. While most advisors are aware that many of the Democratic candidates want to bring back the old version of the rule, one big surprise came out this week—even Mike Bloomberg explicitly says he wants the rule reinstated. That comes as a bit of a shock because he is seen as the most moderate candidate (he was a Republican while mayor of NYC!).

FINSUM: There is a huge amount on the line for the wealth management industry in this upcoming election. Not only will taxes likely change drastically, but the regulatory environment may shift radically.

Published in Wealth Management
Wednesday, 12 February 2020 08:24

The New DOL Fiduciary Rule has a Big Risk for Advisors


Industry lawyers are checking every day, but nothing is happening. Everyone keeps looking at the DOL’s information portal to see if the agency has posted a new version of its Fiduciary Rule. Many thought the rule would be published by the end of the year, but so far nothing. The reason this is important is that the agency is running out of time to get the rule finalized and in place before the election. Rules that get approved immediately before elections are much more likely, and easier, for successors to undue. Therefore, if the rule does not get approved soon (which is near impossible because of the long approval process the White House has once the DOL proposes it), the rule is at risk of a victorious presidential candidate undoing it.

FINSUM: It seems likely this rule won’t get done until right before the election. If Bernie, or really any Democrat, wins it will likely be undone and the path will be paved for a much tougher rule.

Published in Wealth Management
Wednesday, 05 February 2020 10:51

Reg BI Will Cause a Recruiting Bonanza


The SEC’s Reg BI and the DOL’s return of the Fiduciary Rule are set to shake up the industry in several ways (though to a much smaller degree than the 2017 version). However, one of the lesser appreciated areas of disruption created by the rules is in advisor recruiting. Big independent broker-dealers think that the regulatory strain that the rules will put on smaller firms means there will be an exodus of brokers. The logic is that many brokers will feel their small firms do not have the resources, and are therefore not offering the infrastructure to adequately support broker compliance. Accordingly, many big shops like LPL, Ameriprise, and Stifel are planning efforts to seize on this recruiting window.

FINSUM: This makes good sense and it does appear that it will be an ideal time to poach brokers from smaller firms.

Published in Wealth Management
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