The Realities of a Post-DOL World

The Realities of a Post-DOL World

While discussions regarding the ultimate fate of the DOL rule continue to get traction in the news, the reality is that the rule has been in effect since June.

Regardless of continuing debate in the Labor Department, Congress and the media, the firms on the front lines are firmly on the path toward operating under a fiduciary standard that is based on accountability, transparency and fairness.

At the Money Management Institute’s (MMI) 2017 conference, a number of industry experts got together to discuss the current state of the rule, regulatory activities and how firms should prepare for complete implementation.  The participants made it clear that, despite the July 2019 date for implementation of certain elements of the rule, we are already living in a post-implementation world.

For example, firms are already operating under an impartial conduct standard. Advisors and firms must act as fiduciaries, and they’re offering advice that is in the client’s best interest, they are charging reasonable fees, and they are ensuring that no material misrepresentations are made.

The parts of the rule that are delayed are predominantly related to the Best Interests Contract (BIC) Exemption and the documentation required for clients. It will take many firms a significant amount of time to comply. It is very time intensive to collect and record extensive recommendations and ensure that they meet impartial conduct standards.

Many firms are seeing an extensive move toward managed accounts and fee-based advisory services. Firms are shifting commission-based relationships to fee-based relationships, and managed account assets are growing accordingly. This is the best way to avoid issues in complying with the rule.

For more information, please read:
Operating in a Post-DOL World | Wealth Management


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