Wednesday, 24 April 2019 11:46

This New Fiduciary Rule Far Exceeds DOL Rule

(New York)

The current plan for a new New Jersey fiduciary rule is of a new breed. The proposal goes to lengths never seen in the fiduciary regulation world, far exceeding both the SEC best interest rule and the defunct DOL fiduciary rule. The proposal is officially called the “Fiduciary Duty of Broker-Dealers, Agents, Investment Advisers, and Investment Adviser Representatives” and includes an expansive definition of a “recommendation”, imposes a uniform duty on both advisors and brokers, and importantly, “creates presumptive breaches if brokers and advisors do not recommend the best reasonably available option and fee arrangement”. Unlike Maryland, the state doesn’t need an internal Senate vote to enact the rule.


FINSUM: This is a very strong rule that would set an alarming, and in our view, misguided precedent for other states, or even the DOL’s update of its own rule. A presumptive breach based on single recommendations sounds ludicrous to us. Almost all decisions can be made to look poor in hindsight. Further, defining what the “best” investment selection is at one point is nearly impossible.

Published in Wealth Management
Thursday, 18 April 2019 13:53

The Next Big Fiduciary Battle Will Be Here

(Washington)

The anti-fiduciary rule crusaders have been more successful than anyone could have imagined. Back in 2017, the slew of industry groups fighting the DOL’s rule looked woefully outgunned. But in time, they completely succeeded. They are coming off another fresh victory as well—in Maryland—but the next battle looks to be even bigger. That battle will be in New Jersey, a state that seems to have taken the stage as a leader in the state-level fiduciary rule push growing across the US. Unlike Maryland, New Jersey is committed to a rule, which makes this fight more substantial. The new rule in NJ also has the support of some advisors there, giving the proposal more traction.


FINSUM: In our view, it will likely be harder to stop the spread of these state level fiduciary rules than it was at the national level, if only because it is harder to concentrate opposing resources across the whole US. Also, if a state truly has conviction about the rule, it seems more likely to come to fruition.

Published in Wealth Management

(New York)

Most of the industry was hoping that states would back off, or at least slow down, their fiduciary rule efforts after the SEC announced it was working alongside them to craft a more comprehensive Best Interest Rule. The idea is that if the SEC could create a rule satisfactory to states, then it would obviate individual state regulations. However, New Jersey is pressing ahead with its own rule. The state formally put forward a new rule yesterday via the Attorney General Burbir Grewal. The rule is comprehensive and advisors would have serious penalties for not abiding. “Conduct falling short of this fiduciary duty would, under the proposed rule, constitute a dishonest and unethical practice,” says an announcement for the state’s Consumer Affairs Division.


FINSUM: We are still hoping the SEC can make a rule that satisfies states, because the last thing consumers or advisors need is fragmentation.

Published in Wealth Management
Tuesday, 09 April 2019 13:11

Annuities Come Roaring Back

(New York)

A year ago, annuities looked like a product that had outlived its regulatory life cycle. The pending DOL fiduciary rule seemed completely incompatible with the product and its selling practices, so annuities appeared likely to take a big hit. Then the rule got shot down in court, and the whole picture changed. Data is now in on 2018 annuity sales and it looks strong—sales smashed all previous records. In virtually every category of annuities, sales were up considerably, in many case 20% or more.


FINSUM: The annuity sales outlook has completely changed. The next five years—as the number of people 65 or older hits 60 million—looks to be very strong.

Published in Wealth Management

(Washington)

In what likely comes as frustrating news for a lot of the wealth management industry, it is time to start worrying once again about the return of the fiduciary rule. And we are not talking about state level rules, or new interpretations of the SEC rule, we mean the old DOL rule itself. The DOL announced towards the end of 2018 that it was planning to re-release a new version of the rule in fall of 2019. However, it had been quiet until now. This week, a top industry lawyer has commented that the DOL is again working on new fiduciary regulations and may launch in tandem with the SEC, though specifics are lacking.


FINSUM: So what do we know? Firstly, we know the DOL said it would re-release the rule in the fall of this year. We also know that it seems to be actively working on crafting new fiduciary regulation. We’ll let you put two and two together.

Published in Wealth Management
Page 1 of 72

Contact Us

Newsletter

Subscribe

Subscribe to our daily newsletter

Top
We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…