Top RIA Compliance News Articles for the Week of August 20, 2016

1. CRM Can Be Your Sword And Shield In A Fiduciary World (Author- Matthew Reynolds, Wealth Mangement)

This week features five articles focused on the new Department of Labor (DOL) fiduciary rule and we kick things off with an article from Matthew Reynolds who argues that implementing a client relationship management (CRM) tool is very important and will be essential in complying with the new rule. Such a system can help a firm attract, maintain, and grow a steady client base and serve as the “best line of defense” against the new DOL fiduciary rule. Keeping proper client records is becoming more important than ever and we too often see a CRM system as the hub of a well functioning RIA firm’s technology system.

2. The 7 Deadly Myths Surrounding the DOL Rule (Author- Christopher Robbins, Financial Advisor)

Advisors are still digesting and trying to understand as much of the DOL fiduciary rule as they can. While there is still eight months until the rule goes into full effect, there are still many misconceptions and myths surrounding the rule. Matt Matrisian, senior vice president of strategic initiatives for AssetMark, notes “there continues to be misconceptions or a lack of awareness concerning what the requirements will be.” AssetMark released an infographic that explains seven different common myths of the DOL’s fiduciary rule. Along with that, they go on to tell the “truth” of these myths and state the real facts. 

3. 3 IRA Transactions Exempt From DOL Fiduciary Level Fee Rule (Author- Fred Reish, ThinkAdvisor)

In April 2017, when the DOL fiduciary rule is set to take place, most advisors will be fiduciaries. Most prohibited transactions can be avoided as long as the advisor is acting as a level fee fiduciary. However, there are three IRA transactions exempt and automatically result in prohibited transactions. These recommendations are: when a participant takes a distribution and is told to roll it over into an IRA, when a IRA owner is told to transfer his or her IRA to the advisor, and when a participant or IRA owner is told to move from a transaction-based account to a fee-based account. Be sure to read more from one of our top 5 DOL fiduciary rule experts.

4. Mastering the Rollover Process for Retirement Plans (Author- Ed Slott, Financial Planning)

Mastering the IRA rollover process from retirement plans is an area of the DOL fiduciary rule advisers should be considering incorporating into their investing recommendations. Industry guru Ed Slott notes there are three decisions to suggest when it comes to the rollover process: go with a rollover to an IRA, stay with a company plan, or take a lump-sum distribution. When considering the options, every client is different and the decision to take which path depends on the client’s individual situation. Author Ed Slott suggests some variables to consider which include fees, available investments, services provided, the 10% early distribution penalty, creditor protection, convenience, required minimum distributions and estate planning.  

5. Use the DOL Fiduciary Rule as a Catalyst to Transform Your Business (Author- Scott Dixon, InvestmentNews)

Scott Dixon makes the case that advisors should use the new DOL fiduciary rule as a catalyst to transform their business. Few will think of it as a positive and use it to improve client experience and grow and enhance revenue and economic value. While many do not want to be the first to experiment with this type of change due to fear of not succeeding and potential revenue loss, all firms will soon have significant changes to make.

Don’t forget to check out last week’s top RIA compliance news articles on SEC RIA enforcement priorities and more on the DOL fiduciary rule. Be sure to check back next Friday for next week’s top articles!