2. The DOL Fiduciary Rule Doug Baxley, CFP®
Vice President, Retirement and Fiduciary Services Ladenburg Thalmann Financial Services

3. What Are The Key Points? Impacts all service models
Prohibited Transaction
Best Interest Contract Exemption
Private Right of Action
Discretionary Level Fee

4. Who is a Fiduciary? Recommendation: Buy, sell, hold, or exchange
Distribution
Investment manager
Investment strategy
Commission vs. fee-based account

5. What Does it Mean to be a Fiduciary?
Avoid conflicts of interest
Client’s Best Interest
Prohibited compensation
Sales loads, commissions, 12b-1 fees, revenue sharing
Proprietary products
Rollover recommendations
High fee vs. identical, low fee products
Brokerage to fee-based

6. What’s the Best Interest Standard?
At the time of the recommendation
Act with the care, skill, prudence, and diligence
Without regard to financial interests
Not a hindsight standard

7. How Do You Determine Best Interest?
Account Establishment
Commission or advisory
Alternatives to a rollover
Fees and expenses
Services and investments
Product type
Post Establishment

8. Can Commissions & Trails Continue?
Best Interest Contract Exemption (BICE or BIC Exemption)
Allow receipt of prohibited compensation
Commission and non-discretionary advisory accounts

9. What’s Required Under BICE?
Contract between the Firm and client
Acknowledge fiduciary status
Client’s best interest
Reasonable comp
Material conflicts of interest
Cannot prohibit class action
Disclosures

10. What Disclosures Are Required?
BIC Disclosure:
Services, fees and compensation
Right to request “on-demand” disclosure
Monitoring and alerts
Transaction Disclosure:
Prior to, or at the same time as, execution
Web Disclosure:
Fees, charges, expenses, advisor compensation

11. What About Existing Accounts?
Grandfathering:
Systematic investment programs
Exchanges among funds or VA sub accounts
Hold recommendations
No new investments
Negative consent BICE delivery

12. What Products Can Be Used?
“Tier 1” Investments
“Tier 2” Investments – additional standards
Non-Traded REITs and BDCs
Options
BICE for FIA/EAI sales
Sponsor commissions

13. What About Legal Liability?
Private right of action
Cannot prohibit class action
New claims available to clients
Breach of fiduciary duty
Breach of contract
Violation of contractual warranties
Allege recommendations not in best interest

14. What About Discretionary Accounts?
Level Fee Fiduciary
“BIC lite”
Fiduciary acknowledgment

15. What Are the Key Points? Impacts all service models
Fiduciary, Best Interest Standard
Prohibited Transaction
BICE
Private right of action
Level Fee Fiduciary

16. Questions?