The US Department of Labor announced this week that the new fiduciary rule, first revealed late last year, will indeed take effect in the coming months. This is in the face of fierce pushback from the insurance industry due to how dramatically it will impact how independent advisors do business with any qualified money sales.
The Retirement Security Rule (available here) is allegedly designed to close loopholes in the current “Best Interest” regulations, including as they pertain to products like fixed and indexed annuities. It would also change current pathways to compliance (such as PTE 84-24) and expand the definition of who is a fiduciary.
How it Affects You
As expected, the Retirement Security Rule turns you, the independent financial professional, into an ERISA fiduciary when recommending products funded by a 401(k), 403(b), ERISA plan, or even an IRA. Despite opposition from a broad industry coalition, the DOL essentially removed any options you had to avoid this (read IAMS’ Public Comment letter in response here).
What’s more, commissions of any kind are prohibited without finding your way through a compliance maze you will be forced to navigate alone. And without a valid prohibited transaction exemption (PTE), you could face regulatory fines, penalties, loss of commissions, and potential disqualification of your client’s qualified money status.
“This rule will significantly affect the entire annuity industry, including how producers operate, what and how they sell, how they get paid, and the liabilities they face. Fortunately, IAMS is prepared to help our producers adjust to these changes and advocate for their rights.” – Chris Conroy, EVP and General Counsel, IAMS
How IAMS Can Help
Since the rule was announced last October, IAMS has led the charge in our efforts to keep advisors informed and aware of the changes coming on the horizon. Because this rule affects all financial professionals, including insurance-only agents, it’s vital to us that you are fully aware of how this will impact your business.
The final text of the new fiduciary rule was only rolled out a few days ago. The team here at IAMS is carefully examining each page as part of our commitment to providing you with all of the resources you need to know about the Retirement Security Rule. As of now, the rule is set to take effect on September 22, 2024.
Click here to download the DOL’s Retirement Security Rule Fact Sheet to start informing yourself today. We also encourage you to join our upcoming webinar where we will take a deep dive into the rule and how it will affect your business. Mark your calendars for Wednesday, May 8 at 10 am CST and tune in for what might be the most important webinar of the year.
The webinar will cover:
- How the rule applies to all qualified money (ERISA plans, 401(k)s, 403(b)s, TSP, pensions, and IRAs)
- Steps you must take to meet the rule requirements and the consequences for failing to do so
- Compliance pathways including PTE 84-24
- Updated standards on impartial conduct, prudence, reasonable compensation, client disclosures, carrier oversight and more
