We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (22,088)
  • Industry Conferences (2)
  • Industry Job Openings (3)
  • Moore on the Market (492)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (827)
  • Wink's Articles (376)
  • Wink's Inside Story (284)
  • Wink's Press Releases (129)
  • Blog Archives

  • December 2024
  • November 2024
  • October 2024
  • September 2024
  • August 2024
  • July 2024
  • June 2024
  • May 2024
  • April 2024
  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • Advisors Fear Fiduciary Rule Will Harm Client Relationships

    June 30, 2015 by Arthur Postal

    Advisor-client relationships will be harmed to the point where advisors will be unable to serve their clients if the investment advice fiduciary rule proposed by the Department of Labor (DOL) is approved.

    That’s according to a survey the National Association of Insurance and Financial Advisors (NAIFA) conducted of its members.

    According to the survey, two-thirds of advisors said they anticipate that the proposed rule would result in their losing clients because they believe clients would be intimidated or unwilling to sign a “best interest contract” (BIC) as required under the proposal. Also contributing to client loss, advisors said, is that the data retention and disclosure requirements would make it impossible for advisors to serve small or medium-size accounts in an affordable manner.

    More than six out of 10 respondents (61 percent) said the contract requirement is likely to harm their relationships with existing clients. Some 35 percent said the harm done to those relationships would be “significant.” Only 4 percent of respondents said the contracts would improve relationships with existing clients, while 36 percent said either the contract will have no effect on relationships or they are not sure.

    The members also fear that the new proposal will increase costs and limit their ability to provide advice on lifetime annuities.

    The survey found that one of the advisors’ key concerns is that they would be forced to sign a BIC with clients before recommending any products.

    “Requiring a person to sign a contract while you are asking them to open up to you about their financial situation would be very disruptive for some clients,” NAIFA president Juli McNeely said.

    “They may not understand why they need to sign something just to have a conversation, especially if this is a person you’ve been working with for years,” McNeely said. “More paperwork does not always mean more peace of mind.”

    In their responses, the advisors voiced concern about increased liability and higher costs of errors and omissions (E&O) insurance. Nearly 87 percent of the advisors surveyed voiced that concern, NAIFA officials said. Of those, 58 percent said they expect E&O premiums to increase “substantially.”

    The rule would increase liability for advisors by requiring them to enter into legal contracts with clients and opening them to lawsuits in both state and federal courts. Only 4 percent of respondents said they do not believe the DOL rule will result in increased E&O costs, while 9 percent said they are not sure.

    Under the DOL proposal, advisors who receive commissions, revenue-sharing and other third-party compensation would be required to sign what NAIFA termed the “complicated and confusing” BIC with clients before making any recommendations. This would be required when agents’ receive commissions from a third party, the issuer, NAIFA officials said.

    The exemption also would require an annual disclosure document for each client detailing all transactions, fees and expenses, as well as the advisor’s direct and indirect compensation. On top of that, financial institutions would have to maintain and update web sites that show the total costs of all investments available to retirement account holders, NAIFA officials said.

    In regard to annuities, the proposed regulation would create different rules and conditions for various types of annuities and for various types of retirement plans, such as 401(k)s.  For some annuities, the definition of “commission” would be changed.

    “At a time when the Securities and Exchange Commission and Financial Industry Regulatory Authority seek to reduce customer confusion, the DOL rule would do the opposite,” NAIFA said its members indicated.

    NAIFA said respondents to the survey indicated that increasing costs and contractual obligations through the proposed fiduciary standard are likely to impact advisors’ relationships with existing clients.

    Currently, only 26 percent of respondents to the survey require clients to maintain minimum account balances. Some 46 percent of those who responded said they currently impose no account minimums but they would be likely do so, should the DOL rule go into effect, and 41 percent said they are not sure. Of this group, 21 percent said they would require minimums of $100,000 or more.

    Respondents each complete an average of 153 fixed annuity sales, 627 variable annuity sales, 3,895 401(k) plan rollovers and 3,235 individual retirement account rollovers in a year, NAIFA said.

    Originally Posted at InsuranceNewsNet on June 23, 2015 by Arthur Postal.

    Categories: Industry Articles
    currency