There is some good news bubbling on the recently-quiet fiduciary rule front. Rumor has it that the SEC is working on its own new fiduciary rule and will have it done before the current DOL rule is due to be implemented in mid-2019. At least that is the opinion of SIFMA, whose CEO made public comments in a press conference in New York yesterday.

FINSUM: We favor this idea, but do have doubts about just how committed the SEC really is. When Clayton first started, the SEC was very eager about developing a new rule. However, throughout the second half of this year there seems to have been a slow fading of interest and commitment. Only time will tell.

Published in Wealth Management


There was always going to be a big push back against the delay/slow death of the current fiduciary rule. Lawsuits will abound, politicking will happen, but something new—some call it the fiduciary rule’s little brother—is now emerging. That little brother is how industry bodies who set standards may be coming together to form a de facto fiduciary rule despite the federal government backing away from it. For instance, the National Association of Insurance Commissioners is now working on new guidelines for members that would put a “best interest standard of care” in its guidelines. The NAIC changes could mean state regulators across the country adopt the same fiduciary standard.

FINSUM: There seem to be quite a few states pushing for a fiduciary standard, and in a worst case scenario, each of them might develop their own slight variations of the rule, leading to a compliance nightmare.

Published in Wealth Management
Tuesday, 05 December 2017 11:51

RIAs are Forming Their Own B-Ds

(New York)

On the surface it seems kind of counterintuitive, until you realize the logic that is. There is a new trend in RIAs—they are forming their own B-Ds. Many firms don’t know exactly how to handle their due diligence with outside B-Ds in the new regulatory era, and as such, are forming their own B-D entities. Firms that have their own B-Ds can offer a wider range of brokerage, and most feel that to be truly independent, they need their own B-D.

FINSUM: It makes sense to have a B-D arm for wider product offerings and to handle new and legacy businesses that can’t really be facilitated in the RIA structure.

Published in Wealth Management
Wednesday, 29 November 2017 08:57

SEC Makes New Fiduciary Rule a Top Priority


Just a day after the 18-month delay of the fiduciary rule became official, SEC Chairman Jay Clayton made an important announcement on the issue. Speaking yesterday, Clayton made clear that the SEC was going to do something about the fiduciary rule. He said “It’s a priority for me to address this space in light of the action that the Department of Labor took to step into this space”, continuing “I think we belong in this space … And we should try and produce a rule, that, when investors see it, they are happy with”.

FINSUM: These are important comments as over the last month there seemed to have been a loss of momentum at the SEC over whether it was really going to do anything regarding the rule.

Published in Wealth Management


Well, it took a while to happen, but the DOL delay of the fiduciary rule is now official. The rule will not be implemented until at least July 2019, 18 months later than its initially scheduled full implementation date. Importantly for advisors, the BICE will not come into force during that period, taking away the major risk of client lawsuits. While critics of the rule are rejoicing, proponents say the delay is effectively a repeal. The DOL will use the delay to consider how to either amend or get rid of the rule.

FINSUM: This has been on the horizon for some time, but it is good to see that it has actually come true. Here comes another round of legal battles to try to stop the DOL from modifying the rule. We think the SEC might back away from making a new rule, and the whole fiduciary push could dissolve.

Published in Wealth Management
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