CHICAGO -- The financial services industry is not doing itself any favors by failing to comment on the latest Department of Labor fiduciary rule proposals, a panel agreed during today's Insured Retirement Institute marketing conference.
To date, the majority of comments on a rule to delay and potentially amend the fiduciary rule are from pro-rule circles, said Hans Schemmel, director of individual retirement accounts and annuities for Pershing, a BNY Mellon Company.
The DOL is proposing a 60-day delay in the fiduciary rule's April 9 applicability date. In the meantime, President Donald J. Trump directed the DOL to review whether the rule harms retirement savers. A 15-day comment period on the delay is closed, but a 45-day window to comment on the rule itself remains open.
"We're to a certain degree not helping ourselves if we're not making comments," Schemmel said.
He moderated a panel discussion that focused on the future of the rule, as well as what the industry can do to make sure annuities remain a product in the mix for advisors.
Panelists generally agreed that a best-interest standard is here to stay.
"There's not a huge desire to repeal it," Chris Spence said of the rule. Spence is senior director of federal government relations and public policy for TIAA. "I'd say at this point most of the attention is focused on the legislative and regulatory side."
Companies are well down the road to compliance with fiduciary rule disclosure and record-keeping requirements, Spence said.
Figuring out a way to keep annuities as an important part of generating income for retirees is going to be a challenge, said Scott Stolz, senior vice president for investment products at Raymond James.
"Only about 30 percent of our advisors ever sell an annuity at all," he said. "We're going to have to find a way to get advisors to continue to recommend annuities."
The next wave of advisors "are going to have to think more holistic," Stolz said. "If you want to continue to get 1 percent on assets, or more, you're going to have to do a more holistic approach."
Trying to comply with the Best Interest Contract Exemption is going to be very difficult, if not impossible, Stolz said. The amount of paperwork required "is going to be huge," he added. "And it's not going to take advisors long to say 'I'm not going to be bothered with this. I'll just be fee-based.'"
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org.
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