Haley Verbeke
‘Hit Pause’ on DOL Fiduciary Rule, Insurer’s Lawyers Urge Federal Judge
In this article, an insurer called Market Synergy is battling a court case against the Department of Labor’s fiduciary rule. Market Synergy is built upon eleven independent marketing organizations, as well as, 20,000 independent agents (Waddell, 1). Market Synergy’s intention is not to change the DOL fiduciary rule, however, Market Synergy is in an uproar about fixed indexed annuities becoming a part of the BICE right before it was finalized. The National Association for Fixed Annuities, or NAFA, agrees with Market Synergy’s argument. Originally, fixed indexed annuities were under the prohibited transaction exemption instead of now being under the BICE. Market …show more content…
The advisor must make sure the client understands the rules, but doesn’t overstep any boundaries when giving advice. Self-directed IRA’s attract investors who are interesting in assets including real estate, precious metals, or a business (Byrnes, Bloink, 1). The investor doesn’t need advisor assistance to determine which assets to invest in. The third-party custodians who provide the self-directed IRA’s aren’t expected to follow the new rules and regulations of the fiduciary standard because they are only providing the product, not advice. Although self-directed IRA investors do not need advisors to assist them in the decision making of the assets, they might look for feedback on their account’s performance. Advisors may give advice to the investor, as long as the advisor abides by the fiduciary standard’s limitations. The advice given to the client must be solely based on the current performance and avoid making suggestions based on future predictions. If the advisor were to make future predictions about the clients account, then the advisor would have to sign the BIC Exemption along with the client, and in turn, act in the client’s best interest (Byrnes, Bloink, 1). When a client invests in a self-directed IRA, the client must understand that the investor cannot purchase the assets they want to invest, rather the IRA must purchase the assets. A client …show more content…
The first article was mainly about a court case involving an insurer and the Department of Labor. This article tied to the second article about the large insurance companies adjusting to the new fiduciary rule because they have waiting for the court cases, like the one from the first article to be resolved before taking steps towards implementing the new rule into their business practices. All three of the articles discuss the difficulties with the new fiduciary rule. The main idea of the third article was how the new fiduciary rule is increasing the demand to invest in self-directed IRAs where an investor can make investment decisions on their own, and utilize an advisor for account performance analysis as needed. Not only are insurance companies changing the ways they help investors, but investors are deciding to take different routes and avoid dealing with the new fiduciary rule. Each of the articles made it seem like the new fiduciary rule is negatively impacting the investment process. For example, even though investors are avoiding the fiduciary rule by investing in the self-directed, they are still subject to the IRS rules. This is putting more responsibility on the advisor to educate the investor about the IRAs without crossing the line and interfering with the fiduciary standard. This relates back to the second article where it talks about the suitability standard being preferred
‘Hit Pause’ on DOL Fiduciary Rule, Insurer’s Lawyers Urge Federal Judge
In this article, an insurer called Market Synergy is battling a court case against the Department of Labor’s fiduciary rule. Market Synergy is built upon eleven independent marketing organizations, as well as, 20,000 independent agents (Waddell, 1). Market Synergy’s intention is not to change the DOL fiduciary rule, however, Market Synergy is in an uproar about fixed indexed annuities becoming a part of the BICE right before it was finalized. The National Association for Fixed Annuities, or NAFA, agrees with Market Synergy’s argument. Originally, fixed indexed annuities were under the prohibited transaction exemption instead of now being under the BICE. Market …show more content…
The advisor must make sure the client understands the rules, but doesn’t overstep any boundaries when giving advice. Self-directed IRA’s attract investors who are interesting in assets including real estate, precious metals, or a business (Byrnes, Bloink, 1). The investor doesn’t need advisor assistance to determine which assets to invest in. The third-party custodians who provide the self-directed IRA’s aren’t expected to follow the new rules and regulations of the fiduciary standard because they are only providing the product, not advice. Although self-directed IRA investors do not need advisors to assist them in the decision making of the assets, they might look for feedback on their account’s performance. Advisors may give advice to the investor, as long as the advisor abides by the fiduciary standard’s limitations. The advice given to the client must be solely based on the current performance and avoid making suggestions based on future predictions. If the advisor were to make future predictions about the clients account, then the advisor would have to sign the BIC Exemption along with the client, and in turn, act in the client’s best interest (Byrnes, Bloink, 1). When a client invests in a self-directed IRA, the client must understand that the investor cannot purchase the assets they want to invest, rather the IRA must purchase the assets. A client …show more content…
The first article was mainly about a court case involving an insurer and the Department of Labor. This article tied to the second article about the large insurance companies adjusting to the new fiduciary rule because they have waiting for the court cases, like the one from the first article to be resolved before taking steps towards implementing the new rule into their business practices. All three of the articles discuss the difficulties with the new fiduciary rule. The main idea of the third article was how the new fiduciary rule is increasing the demand to invest in self-directed IRAs where an investor can make investment decisions on their own, and utilize an advisor for account performance analysis as needed. Not only are insurance companies changing the ways they help investors, but investors are deciding to take different routes and avoid dealing with the new fiduciary rule. Each of the articles made it seem like the new fiduciary rule is negatively impacting the investment process. For example, even though investors are avoiding the fiduciary rule by investing in the self-directed, they are still subject to the IRS rules. This is putting more responsibility on the advisor to educate the investor about the IRAs without crossing the line and interfering with the fiduciary standard. This relates back to the second article where it talks about the suitability standard being preferred