On July 18, 2016, Gary Sutherland and Paul Smith headed to New York to attend the IA Watch and BD Watch conference on the Department of Labor’s New Fiduciary Rule: How Your Business Must Change.
The time was well spent, except for perhaps, the traffic on the way back. Here are the top five things we learned about the new fiduciary rule.
1. Hearing from the legal and compliance experts on the new DOL fiduciary rule you couldn’t help but hear the following themes.
- Major time commitment
- Major allocation of resources and money
- Technology must lead the way to compliance
- In some cases professionals are still in “denial”
- The use of independent outside consultants
- Lots of work for the ERISA attorneys
- Limit product offerings
- Level compensation
- Combination of both
- Scope
- Arbitration
- Standard of Care, best interest standard and advisor compensation
- Warranties
- Disclosures
- Leave it alone
- Cash it out
- Bring with you to the new employer
- Give it to the advisor
5. Additional comments
- Robo Advisors for small plans and IRAs will be the norm not the exception
- “Good compliance is good business”
- Level fees and inactivity surveillance guidance
- Level fee and the use of BICE light
- Original signed BICE agreement must be kept for 6 years
- ERISA claims no “right” to a jury
- BICE equals best interest contract exemption
