The DOL Dust Continues to Settle

The DOL Dust Continues to Settle

Because I have a passing interest in the Crimson Tide football program, I have friends who live near Tuscaloosa, AL, and who lived through the devastating EF4 multiple-vortex tornado that devastated portions of their city five years ago this month.

I recall their vivid descriptions of the fear that attended the passing of the funnel as they hunkered down in the best shelter their home could afford on short notice. But what was more impactful was their tale of the aftermath as they ventured out of their partially-destroyed house and began to take stock of the considerable damage the twister had caused.

Total storm loss was eventually assessed at $2.4 billion.

And so it is with the release of the 1000-page DOL Fiduciary regulation package dropped on the table by Secretary of Labor Perez the week before last. Despite government assurances to the contrary our venturing out from the release is more a process of damage assessment that it is the celebration for the consumer that the Administration would suggest.

The only good news emerging so far is that the final product wasn’t as onerous as that initially proposed – in some regards, e.g.:

  1. The Regs will not apply to fixed annuities
  2. Disclosure requirements were streamlined and cut back, most not applying until the actually application process
  3. Most business prior to April 10, 2017 is grandfathered
  4. The original data retention requirements have been scaled back, one being the 6-year requirement on recommendations made.

All disclosure and compliance requirements will be in full tilt on January 2, 2018 (actually New Year’s Day, but nobody is selling during the Bowl games). Some anticipate downsides are:

  1. Broad stretches of purposely unclear requirements and vague language in the Regs
  2. The rules will apply to indexed annuity sales
  3. The broadening of the fiduciary responsibility imposed on advisors and how it might interface with state rules
  4. The draconian prohibited transaction excise tax that may apply when proper disclosure has not been given

We will continue to make available materials on the Regs as they are made available by our major carriers. In the meantime webinar opportunities continue.  We recommend the following:

  • Principal Financial “What’s Next? Deciphering the DOL Fiduciary Regulation” – Wednesday, April 27th, 1:00 PM – 2:30 PM CT REGISTER HERE
  • National Association for Fixed Annuities “The Rule Is In: An Analysis Of The DOL’s Final Fiduciary Rule” – Thursday, April 28th, 8:30 AM – 9:30 AM PDT. REGISTER HERE

Take advantage of either or both.

After the tornado of 2010 The Tide went on to win a national championship.  Would that this shakes out as well.  Please contact us with any related questions you may have.