1. DOL Fiduciary Rule FHT&T Lake Saint Louis, MO May 11, 2016
Compliance
DOL Fiduciary Rule
FHT&T Lake Saint Louis, MO
May 11, 2016

2. DOL Fiduciary Rule Published April 8, 2016
7 documents in total (1,023 pages)
Effective date: June 6, 2016
Applicability date: April 10, 2017
Full Implementation: January 1, 2018
Effective date: law of the land
Applicability date: compliance with the rule
Full implementation: phased implementation of portions of the BIC from April 10, 2017 to January 1, 2018
For Broker/Dealer Use Only

3. DOL Fiduciary Rule ERISA Fiduciary: Act impartially
Best interest of the customer
Reasonable compensation
Eliminate conflicts of interest
Discuss fiduciary and how ERISA fiduciary is different from SEC fiduciary.
For Broker/Dealer Use Only

4. Applicable Registrations
401k
Profit Sharing
Defined Benefit
Simple
IRA
Roth IRA
Coverdell
SEP
HSA
Yet to be determined how traditionally non-ERISA plans will be handles.
For Broker/Dealer Use Only

5. Investment Advice For a fee or other compensation: Recommendation to
Acquire
Hold
Dispose of
Exchange
Compensation means DIRECT (Commissions) or INDIRECT (incentive trips, etc)
For Broker/Dealer Use Only

6. Investment Advice For a fee or other compensation:
Recommendation regarding:
Investment policies or strategies
Portfolio composition
Selection of investment manager
Rollovers, distributions or transfers
For Broker/Dealer Use Only

7. Grandfathering
Accounts/Transactions PRIOR to Applicability Date (4/10/17)
Compensation can flow
Hold recommendations or Reallocation
PIP compensation can flow
Existing compensation structures are permitted SO LONG AS no further fiduciary advice is provided with respect to that account (obviously an issue for additional deposits)
Sub-Account Reallocations and switches of fund allocations within the same mutual fund family are OK—SO LONG AS no additional or different compensation is received
For Broker/Dealer Use Only

8. Grandfathering
Accounts/Transactions PRIOR to Applicability Date (4/10/17)
NO investment advice
Including on additional deposits
For Broker/Dealer Use Only

9. The Good, the Bad and the Ugly
For Broker/Dealer Use Only

10. The Ugly: Best Interest Contract Exemption
Allows for commission-based and other un-level compensation.
Sounds great! What’s the Catch?
Lawsuits
Class Action Lawsuits
Disclosures
For Broker/Dealer Use Only

11. The Bad: Increase in compliance burden Increase in potential liability
Documentation of fiduciary care
Increase in potential liability
Greater than suitability standard
What is worth the risk
Account minimums
For Broker/Dealer Use Only

12. The Good:
Jeanne
Zeonia
Susie
For Broker/Dealer Use Only

13. Level Compensation Fee-based Accounts
New World Order
Level Compensation Fee-based Accounts
For Broker/Dealer Use Only

14. New World Order Annuities Traditional Fixed - no change
Variable Annuities-advisory only (no commission) OR BICE
Equity-Indexed Annuities-BICE Only unless industry comes up with fee-based FIA.
For Broker/Dealer Use Only

15. Questions
For Broker/Dealer Use Only