Top RIA Compliance News Articles for the Week of January 21, 2017

1. PRI Policy Brief: Trump Administration & the State of the DOL Fiduciary Rule (Author- Jason C. Roberts, LinkedIn)

Jason C. Roberts, one of our top 5 DOL fiduciary rule experts to follow, brings us this brief on the current understanding of the new administration’s plan in regards to the DOL fiduciary rule. Roberts explains that, “following the inauguration, White House Chief of Staff Reince Priebus issued a memorandum instructing all executive departments and agencies to place a moratorium on new and pending regulations.” However, Roberts also notes that, “it is also uncertain as to what impact, if any, the Priebus memo will have on the Fiduciary Rule itself”since the rule technically became effective in June 2016. With that said, Roberts cites a few other anticipated move by the administration that will likely delay the rule. Despite the uncertainty, Roberts concurs with our opinion that advisors should continue to comply as if the rule still will go into effect April 10th.

2. Interesting Angles on the DOL’s Fiduciary Rule #34 (Author- Fred Reish, FredReish.com)

Fred Reish, also one of our top 5 DOL fiduciary rule experts to follow, published his 34th article about observations on the DOL fiduciary rule. In this piece, he tackles the DOL’s second set of FAQs that were released January 13, 2017 interpreting the regulation and exemptions. Reish discusses the following question, “would a free dinner seminar offered by an investment adviser as a means of marketing services or investments to a group of retirees or individuals approaching retirement be a widely attended speech or conference within the meaning of the general communications provision of the Rule?” He gives his insight on whether certain situations would be considered fiduciary advice or not as well as what the DOL answered to this particular question. 

3. Two Possible Routes Trump Could Take to Delay DOL Fiduciary Rule (Author- Greg Lacurci, Investment News)

It’s no secret the DOL fiduciary rule has the potential of being delayed. Andrew Remo, director of legislative affairs for the National Association of Plan Advisors, says “I think there’s an expectation the applicability date will be delayed at least 60 days.” Two possible outcomes are emerging which would delay the DOL fiduciary rule. Greg Lacurci writes that the “DOL could propose a delay that would be subject to public comment or the administration could issue an interim rule seeking delay based on ‘good cause.”  The Obama Administration delayed the rule three times after taking into consideration public comment and revising it tailored to the critique received in 2009. Announcements of the future of the rule have yet to be made.

4. SEC Could Step Up if DOL Fiduciary Rule is Overturned, FINRA CEO Says (Author- Chelsea Emery, Financial Planning)
   

FINRA CEO Robert Cook spoke at the annual conference of the Financial Services Institute on how he feels the Securities and Exchange Commission (“SEC”) would be “the most appropriate agency to implement a new regulatory standard” and “FINRA would hope to play an active role.” The fate of the Department of Labor’s (DOL) fiduciary rule remains uncertain and Trump has yet to speak on his opinions regarding the rule. Cook also answered questions at the conference asked by FSI CEO Dale Brown on what FINRA’s role is in relation to fiduciary duty for financial advisors and what the goals for FINRA are for the next five years.

5. In Post-DOL World, Advisors Have to Do More Discovery (Author- Diana Britton, Wealth Management)

Diana Britton composes this article on what life should be like for advisors after the DOL fiduciary rule. David Canter, executive vice president of practice management and consulting for Fidelity Clearing & Custody Solutions, said”moving forward, especially in a post-Department of Labor rule world,advisors have to demonstrate and supply value to clients beyond investment management if they want to defend price.” In addition, Canter also said that advisors have to be better discoverers, asking more probing questions of clients and prospects. To drive home the need to be better listeners, Canter points to a recent mystery shopping program conducted by Fidelity during which potential clients interacted with firms as if they were a prospect. The program revealed that advisors talked more about themselves and the firm rather than about the prospect and their goals. Canter recommends, “the expanded role of the advisor should be to look at a client’s holistic financial life.”

Don’t forget to check out last week’s top RIA compliance news articles focusing cyber insurance and the potential future of the DOL fiduciary rule. Be sure to check back next Friday for next week’s top articles!