June 9, 2017 What You Need to Know

JUNE 9 changes When the DOL Fiduciary Rule was delayed until July 1st 2019, certain changes were made Transition Period to July 1, 2019 FIA’s and VA’s can be sold under two PTE’s (transition 84-24 or BICE) No requirement for written disclosures and representations of Fiduciary Compliance Temporary Enforcement Policy “Agents who are working diligently and in good faith to understand and come into compliance with the fiduciary duty rule” DOL will review rule in accordance with Feb 3rd Presidential Memo. The portion of the DOL rule that is being delayed until July 1st 2019 deals with Phase 2 of the Rule. - this phase deals with exemptions, which regulate the sale of annuities sold with retirement funds. In particular, the BICE which requires a financial institution to take liability for each contract and give clients the right to sue over investment advice. PTE 84-24 was also part of the phase 2 delay.

June 9 Requirements Investment advice to qualified plan and IRA participants must meet a fiduciary standard You must comply with Impartial Conduct Standards Transition PTE 84-24 requires compensation and fee disclosure

Fiduciary Prudence Obedience Loyalty No Misleading Statements

Impartial Conduct Standards Must act in the “Best Interest” of your client Must not charge more than reasonable compensation Must make no misleading statements

84-24 You become a fiduciary when providing investment advice to a retirement investor You must follow Impartial Conduct Standards including receiving no more than reasonable compensation You must provide compensation, fee and material conflict disclosure to your client

Reasonable Compensation Principle based approach Market based reasonableness

Sample Compensation Disclosure

Business Submission Process Follow a Process Fact Find Analysis Illustration Application Compensation and fee disclosure signed by client Keep files while contract is active + six years

Business Submission Process Forward applications to carrier or New Business – As you currently do Keep everything else in a client file

Beyond DOL What will the adviser of the future look like post DOL We are not looking for a “Quick DOL fix” Our DOL platform will consider how we help you grow your practice

Technology FireLight Riskalyze CRM & Proprietary Software Being Developed

FireLight Manages the application data submission process for any line of business and product type on a single platform Expedites submission process Eliminates NOGO Enhances the adviser – client user experience Approved DOL Fiduciary Rule sales process

Riskalyze Cutting edge technology to identify the client’s acceptable level of risk and reward Shows vital role Index Annuities can play in a portfolio Using a client’s risk score and their portfolio’s risk score, ensures that the portfolio aligns with their investment goals and expectations

Proprietary Technology To be built Provide targeted solutions Product Gap Protection Gap Income Gap Protected Income Gap Targeted Market Solution

Training Product Market Practice Development

Marketing Support Leads Mentorship Case Design Seminars Prospecting and Marketing Materials

Products and Compensation Continue with our Robust Platform of Products Competitive Compensation

Final DOL Rule July 1, 2019 Complete DOL platform support Financial Institution Forms FAST team DOL Mentoring Advanced Markets and Case Design Adviser and Client Websites