White Paper Gives Firms a Checklist Ahead of DOL Rule Change

FolioDynamix and Beacon Strategies LLC, an industry research group, have released a white paper to help advisory firms and advisers drill down to the actual impact of the upcoming fiduciary rule from the Department of Labor (DOL).

The content draws on study groups that discussed the rule change with broker/dealer, insurance, and RIA firms across the industry, facilitated by Beacon.

The two firms aim to help advisers affected by the expansion of the “best interest standards” to individual retirement accounts (IRAs) and 401(k) rollovers. With confusion over both the dates involved and the actual provisions of the lengthy legislation, many firms are under the gun with some version of the legislation inevitable.  

“Understanding the DOL Fiduciary Rule Change and the Utilization of Fee-Based Products” explains the highlights of the legislation and covers ideas for best practices to avoid the expense and time that could potentially go into the new best interest contract exemption (BICE). The researchers believe firms should consider moving client accounts into the advisory space with its clearly disclosed fees and transparency into underlying investments.

The paper answers a range of questions, starting with a solid definition of the rule change and how it could impact firms, and recommends some best practices. Also covered are business basics that need to be considered in developing due diligence requirements for a fee-based advisory platform provider and why firms might consider fee-based product alternatives.

FolioDynamix is offering a complimentary “DOL Risk Exposure Assessment,” during which an FDX analyst will run through a firm’s retirement business and offer suggestions to allow firms to meet the regulations by the deadline.

“Philosophically, we are strong believers in fee transparency and believe it helps advisers build strong long-term practices,” says Steve Dunlap, president of FolioDynamix, “but recognize there are many circumstances in which commission business also makes sense. Our immediate concern is that this new rule will be both time-consuming and potentially difficult for firms to administer. Our goal is to help firms navigate these waters while minimizing the cost increases resulting from compliance to the rule.”

“Understanding the DOL Fiduciary Rule Change and the Utilization of Fee-Based Products” can be downloaded from FolioDynamix’s website.