The Department of Labor released a preliminary of version of its fiduciary rule on April 14, 2015 and the finalized version was made public a year later on April 6, 2016. Although September 6 marked five months since the rule’s release, it continues to be surrounded by ambiguity and uncertainty; an unfortunate situation furthered by the presence of multiple lawsuits challenging the new rule. Corporate Insight last examined DOL rule coverage among firms in the Annuity and Life Insurance Monitor coverage groups in an April 5, 2016 blog post, at which point Principal, MassMutual and Nationwide provided DOL rule-related resources for advisors.
Nationwide continues to add helpful information to its dedicated DOL site. A recently released Nationwide Retirement Institute Countdown to Implementation survey found that a significant number of financial advisors are unaware not only of their firms’ timelines for implementation, but also of the proposed compliance procedures themselves. The survey revealed that only 42% of advisors are aware what implementation training their firms will provide, and only 33% have been updated on their firms’ compliance procedures. Further, the study found that the new rule’s Best Interest Contract Exemption (BICE) clause is an area of major concern, as 78% of advisors surveyed identified the BICE clause as an area that could have the greatest impact on their business, but only 23% are aware of their firms’ plans concerning the BICE clause. Firms need to maintain a clear and consistent line of communication with their advisors, yet the Countdown to Implementation survey clearly demonstrates that they are failing in that regard.
Here is a rundown of other resources published for advisors since our last look at this topic in April, including downloadable guides, presentations and multimedia:
- Jackson National features a detailed DOL Fiduciary Rule Overview (PDF) white paper for advisors. While noting that advisors have time to evaluate their business before the rule goes into effect, it urges them to begin their compliance preparations as soon as possible. The white paper is particularly noteworthy for its helpful table with shaded rows that indicates if compliance is required under several hypothetical circumstances, often a major point of uncertainty under the new rule.
- MassMutual continues expanding on its advisor resources, recently adding two Brainshark presentations that review key dates, identify products that may be impacted and discuss exemptions and effects on group annuity plans.
- Pacific Life stands out among firms in our coverage groups as the only firm to directly promote an annuity that considers the DOL rule. The firm is marketing its Pacific Odyssey fee-based variable annuity as the ideal product to fit into a fee-based post-DOL rule practice. The firm added a document to the advisor site Optional Benefits page that features a table highlighting some of the Pacific Odyssey’s key characteristics.
- Pacific Life also published a guide that reviews the fiduciary rule for advisors. In sections organized by common advisor questions, the guide defines four facets of the rule—redefining who is a fiduciary, delineating what is and is not investment advice, creating the BICE and revising PTE 84-24—and explains that the rule was necessary because previous rules were outdated. The firm provides basic information about which advisors may be affected by the rule and how they should be compensated. In a final section, Pacific Life promotes its products and services as tools for advisors to serve their clients’ best interests.
- Principal released an 11-page Fiduciary FAQs guide for advisors that includes thorough answers to common queries regarding the DOL rule and features a cover page that lists the document’s highlights.
- Voya added an advisor site DOL Fiduciary Ruling 360 Video Series page that includes three videos—The Basics, Best Interest Contract and Rollovers—reviewing some of the new rule’s key details and potential effects. Importantly, the second video is completely devoted to the BICE clause that so concerned advisors in Nationwide’s survey.
Pacific Odyssey PDF