On Monday night, Labor Secretary Acosta announced in an article in the Wall Street Journal that the DOL Fiduciary Rule will become effective on June 9th, 2017 – stating no legal reason to delay the rule further.
This means that all agents/advisors making a recommendation to a client funding a qualified plan or IRA on or after June 9th will become a fiduciary and must:
- Comply with Impartial Conduct Standards (Best Interest, Reasonable Compensation and no Misleading Statements, I.E. 84-24)
- Compensation and Fee disclosure (to be maintained in client file)
Secretary Acosta went on to state that the rule needed more public input – presumably leaving the door open for modifications prior to January 1st, 2018.
It is critical to understand the changes coming on June 9th – agents and advisors can continue to sell under 84-24 but will be held to a fiduciary standard when making recommendations to IRA and qualified plan clients. This means meeting Impartial Conduct Standards (ICS) and compliance with compensation and fee disclosures for all qualified plan or IRA recommendations starting June 9th.
For procedures going forward with qualified plans and IRAs:
- We will be transacting annuity and life insurance business through the transition PTE 84-24 until January 1, 2018
- Advisors do not need to affiliate with a Financial Institution nor will BICE be required to sell FIAs until January 1, 2018
- We will continue to build our DOL compliance platform in preparation of January 1, 2018
Over the coming weeks, many carrier partners will be hosting web conferences on how to comply with the June 9th date – We encourage our partners to attend these when possible. CPS will continue our ongoing narrative of updates and solutions as they are presented to share with the field as well.
The only constant is change.
Rest assured that CPS is committed to our partners to provide the tools and resources needed to protect your business so you can continue to provide your clients with excellent service.