Breaking dol ruling

How Will the DOL Fiduciary Ruling Affect Advisors?


The Department of Labor ruling on fiduciary standards for giving retirement advice has finally been released. The initial proposed fiduciary rule was designed to protect families from advisors who may not be acting in their best interest but was met with much opposition from the financial industry.

Fortunately, the DOL responded to many of these criticisms and the finalized version of the rule is much more lenient than expected.

The big change brought about by the rule affects advisors who are paid commission for their recommendations on indexed and variable annuity products. They now must satisfy the conditions of the Best Interest Contract Exemption (BICE). This requires advisors to pledge to all existing and new clients that they will act in their best interest, charge only reasonable compensation, and will not mislead them about fees.

This disclosure can be included as part of the paperwork for the sale of the product and Labor secretary Thomas Perez expects that the BICE language can be “as simple as a page or even a paragraph added to an existing document.” Traditional and fixed-rate annuity sales are exempt from BICE.

We are hopeful this ruling will provide those families we serve with an increased sense of trust and security while largely meaning business as usual for insurance professionals. The deadline to comply with the ruling is January 1, 2018.

To fully analyze the ramifications of the ruling, we recently hosted a webinar with Chip Anderson, President of NAFA. Chip has over 35 years of industry experience and will break down how the ruling will affect your practice.

Watch the full webinar.


Posted in Annuities, Health, Life, LTC, Webinars
comments powered by Disqus