Wealth Management

(New York)

Is it a huge deal or not? No one seems to be able to decide. The issue at hand is that the new SEC Best Interest rule explicitly requires brokers to consider costs when recommending products to clients. That is potentially a very big change. However, some say brokers have already been doing this as part of suitability rules, so it may not change practices much. It is important to note that brokers do not need to recommend the cheapest product to clients, but they must take cost into consideration.

FINSUM: Considered in a vacuum, taking cost into consideration has long been a no-brainer. The bigger question is how the SEC decides to enforce this standard. Hindsight will always be 20-20 in an investigation and this could be a big disadvantage to brokers.

(New York)

Annuities have come a long way in the last few years, with industry standards and selling behavior becoming much cleaner. However, annuities sales are still a challenge because it is often hard to get an individual to trade a large, liquid lump sum for payments that can often be far in the future. With that said, TIAA has an annuity it debuted last year that might prove quite helpful. The provider’s Income Test Drive program allows buyers of annuities to opt out of their income agreements within two years without any penalty. The program is part of a wider trend in annuities, according a product manager in the space, saying “They used to have one product try to be everything to everybody, and the costs outweighed the benefits. Now there are more streamlined options”.

FINSUM: This TIAA option seems like a very good way to help investors bridge their anxiety about trading a lump sum for future income.


In may seem like an eternity in market terms, but 2021 is right around the corner if you are a regulator. The DOL is reportedly racing to get a new DOL rule finalized and implemented before a new administration may takeover in January 2021. The DOL is reportedly set to release a new version of its signature rule this December. But even if it does so, experts say it will a tight push to get a rule implemented before a new administration might take over. In fact, many say the DOL will need to debut its proposal for the new rule by October in order to achieve the January 2021 deadline.

FINSUM: So we know this rule is supposed to be “harmonized” with the SEC’s rule, but there is preciously little additional information. We do think the tight timeline will push the department (which has a new chief after Acosta resigned) to issue a rule more quickly than most in our industry probably realized.

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