If you're already a member, please log in. If not, please register.

Proposed Fiduciary Standard Could Make Waves in Retirement Advisory Industry

nmforlifeadmin


Milwaukee Business News (09/21/15) Dill, Molly – A regulation proposed by the Department of Labor could have a major impact on the retirement advisory industry. The proposed regulation, which would require that brokers and advisors disclose to retirement account clients whether they receive a commission for recommending certain products, has received both praise and pushback from the industry. Northwestern Mutual Life Insurance Co. has submitted a comment in opposition to the proposed rule that reads, in part: “While Northwestern Mutual supports the (Labor) Department’s objective of changing the standard of care that applies to persons giving retirement advice to clients, we believe the proposal significantly misses the mark on the criteria noted above and would lead to increased consumer cost, greater consumer confusion, and reduced consumer access to high-quality investment products.” The fiduciary standard also puts an added burden on advisors to substantiate that the chosen product is the absolute best way for a client to invest, which increases the liability on the advisor, the representative said. That increased liability will, in turn, escalate time spent on compliance and result in increased rates on advisors’ Errors and Omissions insurance, which could be passed on to customers, said Michael Smith, LUTCF, president at CPS Horizon Financial. Full article