I was at RBC late last week and Steve Blume from RBC did a presentation on the DOL Rule and he gave all of the attendees a sealed bag. The bag represented
the pending DOL Rule and what was inside the bag was a Magic 8 Ball because at this point, no one can really predict what is going to happen next with
this rule! We all feel a little like the great seer, soothsayer and sage, Carnac the Magnificent in trying to guess what the outcome of the DOL Rule
Here is also a quick break down of what you need to know on the Rule's current status:
What do we know?
A proposed delay of the Rule has been filed in the Federal Register yesterday. The proposed delay would move the effective date from April 10,
2017 to June 9, 2017. Comment period is open until March 17, 2017 to discuss the DOL's proposed delay. Comment period is also open until April 17,
2017 to comment on the President's order regarding the Rule from February 3, 2017. We have a short breather, but we will continue to look at the April
10th date for now, until we hear otherwise.
What should you do?
If appropriate, you should continue to discuss the DOL Rule's status with your clients and answer any applicable questions. Review your retirement accounts
and meet with clients to ascertain whether any changes to those accounts would be in the client's best interest. Questions on this topic may be directed
to Corey Young, who can assist you in reviewing various DOL type products that may be better suited
for your clients.
What is IPI doing?
The current Rule requires firms to send out to all retirement brokerage accounts a notice that the client's accounts will move from a service level of
a suitability standard to a best interest standard (i.e. fiduciary) on or before April 10, 2017 along with some other general information. RBC has
offered to send out this letter for a cost, but required the letter to be sent to them in February and then moved the date to March 1. However, while
RBC's timeline versus potential delay and cost was appreciated, it was not reasonable for us to use them to send the letters out with the uncertainty
of the Rule's timing. Additionally, I am concerned that your clients may be confused if the letter is sent out and the Rule is delayed, changed or
not implemented. Client confusion is the last thing that anyone would want for clients. If you have questions or concerns about the letter or the Rule,
please let me know and I'll be happy to discuss it with you.
If the Rule does go into effect and it still requires the negative consent letter to be sent out to retirement brokerage accounts (RBC and direct), we
will send them out to your clients from Decatur. I am currently drafting the document which unfortunately will be about 9-10 pages in length due to
the requirements of the Rule. As we get more clarity on the implementation date on the Rule, I will provide a copy of the final document for you, so
you are prepared to discuss it with clients, if necessary (fingers crossed the requirement for a contract with the client part gets nixed - Best Interest
In addition to sending out the negative consent letter, we also had some great sessions at our Advance meeting last week on various topics and ideas that
will assist you directly and indirectly with preparing you and your clients if the Rule is implemented. We will continue to send out information as
it is known about the status of the Rule and provide you with guidance on various products and vendors that may assist you and your clients with DOL
compliant type items.
Have a great weekend and if you have questions on DOL -- please let us know. Thanks, Renee