Senior Market Sales Prepares for All Possible Fiduciary Rule Outcomes

By Bill Kauffman, Vice President, Financial Solutions

Senior Market Sales Prepares for All Possible Fiduciary Rule Outcomes

Happy holidays, everyone. As you’re aware, the recent election has generated much speculation about the future of the Department of Labor (DOL) fiduciary rule. While uncertainty surrounding the fiduciary rule remains, I want to reassure you that Senior Market Sales (SMS) is preparing for all possible outcomes.

What are those possible outcomes? Rules can be altered or revoked, effective dates can be postponed, and lawsuits challenging the rule could impact its implementation. But keep in mind that in all cases, the process of unwinding the rule is complex and would take time. With the rule set to go into effect April 10, 2017, experts say the rule likely will become effective before efforts to revoke it could interfere.  

So, to prepare for all of the possible outcomes, SMS has been taking several strategic steps.

The DOL may develop a new financial institution category allowing independent marketing organizations (IMOs) to sell fixed indexed annuities with retirement funds. SMS is prepared to take action as soon as there is clarification.

We also have had discussions with a number of broker-dealers and RIAs, large and small, some of which have announced that they are prepared to put all annuity business through the fiduciary process effective Jan. 1, 2017. We have discussed partnering with a number of them and their registered representatives. Though the business will flow through the grid — OBAs will likely not be allowed — they will need SMS’ efforts to process the new business, support the case management and continue to support from a training standpoint the efforts of their registered reps. If the broker-dealer is not prepared and is unable to sign for the Best Interest Contract Exemption (BICE), SMS is preparing to partner with those broker-dealers and accept that role, as well.

Finally, what about insurance-only producers? We will have several options available to SMS and our producers. One is to work with an insurance carrier that wishes to provide the financial institution services and sign off on the BIC Exemption. As another option, we are prepared to sign off on the BIC Exemption, if we are granted the authority. And a third option is partnering with a broker-dealer or RIA that will be signing off on BIC Exemptions and will offer insurance-only producers that option.

Whatever the case, SMS has your back and is preparing for 2017 and beyond. We are prepared to take the steps necessary to fulfill our commitment to you to help you leverage time, make more money and put your business in a position of distinction.

If you have any questions about SMS and the fiduciary rule, please call us at 1-877-645-4939.