In response to the Department of Labor’s (DOL) final fiduciary rule, LIMRA LOMA Secure Retirement Institute is developing a number of resources to help financial services companies adapt to the new fiduciary rule.
“The Institute was established to offer relevant and insightful retirement research and education for every sector of the retirement market. We know this rule is a transformational event for our members and the industry and we want to help you respond to this new reality,” said Robert Kerzner president and CEO, LIMRA, LOMA and LL Global. “Over the next weeks and months we will host several events, where industry leaders tasked with implementation can share their ideas and perspectives on the challenges created by the DOL fiduciary rule. These events will facilitate collaboration across the retirement market to find industry-wide solutions.”
- 2016 DOL Fiduciary Solutions Working Groupon April 7-8, 2016 at LIMRA headquarters, Windsor Conn. This two-day session will bring together executives tasked with implementing the new DOL rule to discuss what compliance resources can be developed as a shared utility/solution for the financial services industry to help respond to the new requirements (This meeting will be the first in a series of collaborative meetings and conversations).
- DOL Fiduciary: Examining The Final RuleVirtual Town Hall with Brad Campbell on April 14, 2016 at 2:00 pm. ERISA attorney Bradford P. Campbell, counsel at Drinker Biddle & Reath LLP, will provide an overview of the final rule with emphasis on what has changed from the proposal; the scope of rule’s application (basis for fiduciary status); implications for product manufacturers and distributors; and the most significant areas of litigation risk.
- DOL Fiduciary Rule Symposium: Managing Challenges and Finding Opportunitieson May 3, 2016, in Boston, Mass. The one-day symposium will bring together industry experts, regulators and consultants to examine the final fiduciary rule and its implications to distribution, product design, communication efforts. Individuals across all segments of the financial services industry seeking insights into the opportunities and challenges that the new rule will present to the financial services industry should attend.
LIMRA Secure Retirement Institute will deploy its research resources to support companies’ efforts to respond to the new fiduciary rule. Included in its 2016 research agenda, Institute also is conducting a series of studies to help our members understand the impact of this rule on the market and learn how other companies are responding:
- DOL Viewpoint Surveys: A series of surveys of asset managers, retirement plan services providers, distributors and advisors to track how they plan to adapt to the new requirements around the DOL rule.
- Industry Impact Assessment – Pre-DOL rule: An analysis of the state of the industry today (sales, distribution, marketing) in order to monitor the impact of the rule. This research was not done when other markets (UK, Australia, Netherlands) instituted fiduciary rules. The Institute believes it will be tremendously important to demonstrate the effect of the rule in the future.
LOMA Secure Retirement Institute is creating a range of training programs to meet the different needs of home office employees and producers:
- A basic course suitable for all of member firms’ associates. This course would provide the fundamentals so all associates know the basics about the new fiduciary rule and how it may impact their company.
- Educational modules for financial professionals on basic and more complex issues around this new rule. These courses will be on a platform like LIMRA’s anti-money laundering program so a company can track and demonstrate adherence to best practices.
“We have established a one-stop, user-friendly microsite offering the latest news and insights on the final DOL rule,” noted Kerzner. “As the Institute publishes research and issue papers, develops training and announces Town Halls and other events, the information will be highlighted on the microsite (http://www.limra.com/DOL/)
The Insured Retirement Institute (IRI) released the following statement from IRI President and CEO Cathy Weatherford after the Department of Labor issued its final fiduciary rule.
“At a time when Americans are more responsible than ever for ensuring their financial security throughout retirement, there has never been a greater need for retirement income that cannot be outlived. President Obama and his Administration have long recognized the need to promote lifetime income, as stated by the White House Task Force on the Middle Class and evidenced by the Administration’s efforts to facilitate access to lifetime income in workplace plans. Given this high level of support, we made it a point of emphasis to make the Administration and Department of Labor aware of how its fiduciary rule proposal would limit consumers’ choices on retirement products including lifetime income strategies.
“Our goal throughout the process has been to ensure that this rule would not harm millions of American workers saving for their retirement years. In addition to concerns about limited consumer choice on lifetime income products, IRI and its member companies, along with hundreds of Members of Congress on a bipartisan basis and thousands of other commenters, have been concerned that the rule as proposed would restrict access to retirement planning advice for younger savers and those with modest savings.
“We have provided considerable, constructive input to the Department of Labor, the Administration, and policymakers on Capitol Hill to help address these concerns. Through our comment letters, testimony and meetings with regulators, we have provided specific revisions to ensure retirement savers can continue to access retirement planning advice and a full array of lifetime income options. We will carefully examine the rule in its final form to determine if these important changes have been made to avoid any harmful consequences for retirement savers.”
“NAIFA members and others within the insurance and financial services industry worked diligently with the Department of Labor to address many concerns we had with the DOL’s draft rule,” said Jules Gaudreau, president of the National Association of Insurance and Financial Advisors. “We appreciate that DOL has accepted many of NAIFA’s suggestions and reworked some portions of the rule to address concerns raised during the review process.”
“We remain cautious, and it remains to be seen how the practical application of the rule will affect middle-market consumers who need retirement planning advice and services. But we are pleased to see, for example, that DOL has incorporated our suggestions on the effective date of the rule, grandfathering of existing clients, and timing of when signatures are required on best interest contracts.
“NAIFA is in the process of completing an in-depth analysis of the rule and will continue to provide training and education to help our members deal with the rule’s new requirements and restrictions, We will educate our members and use our grassroots advocacy strength to push for legislation that would best serve consumers.
“This is a crucial issue for us. There is a retirement crisis brewing in our country with large swaths of the population financially unprepared for the future. We need to find a way to continue to provide advice and support for those who are trying to ensure the financial security of their families.”
Below is a statement from Financial Services Institute (FSI) President & CEO Dale Brown:
“Affordable, objective financial advice is a critical component to hard-working Americans’ ability to save for a dignified retirement. The Department of Labor’s two earlier proposals were complex and unworkable. As we have said since day one, there is no compelling evidence this rule is necessary to achieve a uniform fiduciary standard, and DOL’s own analysis fails to make the case. We will spend the coming days thoroughly analyzing this rule to determine if it protects Main Street investors by preserving their access to affordable, objective financial advice delivered by their chosen financial advisor.”
Janet Trautwein, CEO of the National Association of Health Underwriters, said: “NAHU is concerned that expanding the fiduciary standard to include not only service providers who assist employers and employees with Individual Retirement Account (IRA) options, but also those who assist with Health Savings Accounts (HSAs) will greatly impact employee access to HSAs. Employees who participate in employer-sponsored health plans do not bear the same type of financial risk as individuals investing in retirement plans. It is a mistake to apply the same requirements to both types of plans.”
“The new rule also creates unprecedented new compliance responsibilities and liabilities for employers and licensed health insurance agents and brokers. NAHU is apprehensive that employers and health insurance agents and brokers will be unable to accept this new liability and will be unable to assist employers with HSAs through employer-sponsored health plans. This may reduce access to the benefits of HSAs for their employees, resulting in fewer health plan choices and more limited benefit options.”