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 (21,155)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (414)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (800)
  • Wink's Articles (353)
  • Wink's Inside Story (274)
  • Wink's Press Releases (123)
  • Blog Archives

  • 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
  • Fiduciary countdown: Firms are in ‘escalation time’

    September 9, 2016 by Andrew Welsch

    Accelerating software launches, printing educational materials and hiring new staff: These are just a few measures brokerage firms are taking — quickly — to ready themselves to implement the Department of Labor’s fiduciary rule.

    “Now we are in a real focused escalation time where we are giving advisers specific directions on what they can do to prepare,” says Andrew Crowell, vice chairman of D.A. Davidson’s Individual Investor Group. “Post Labor Day, we will be providing them with firm-based and third party solutions.”

    Kathy Gremillion, head of Fiduciary Strategies at RBC Wealth Management-U.S., a position created in June, says the firm has accelerated its planned launch of new financial planning software to October or November. RBC views having a more comprehensive tool in the hands of advisors as critical, she says.

    “Technology is a significant component in terms of how we supervise accounts, and make sure that interactions with client are documented,” she says. “There are prohibited transactions by the DoL rule, trades that can’t be made going forward, and we have to make sure that we have the ability to prevent those trades from even getting started.”

    ’NOT YOUR PANACEA’

    One of several looming quandaries for wealth management leaders is whether to take advantage of the best interest contract exemption in order to be permitted to charge commissions in retirement accounts

    “At this point we do intend to use the BIC,” says RBC’s Gremillion.

    D.A. Davidson’s Crowell says his firm is evaluating how and when the BIC exemption can be used by the firm’s 400 advisers.

    “We expect that we will [use it], but my expectation is that it will be narrowly applied,” says Crowell, adding that advisers should not “expect the BIC to be your panacea next year.”

    Planning for the rule’s implementation is in progress at firms across the industry, but many firms have yet to make their plans public. Edward Jones has been one of the exceptions.

    Last month, the St. Louis-based brokerage firm, which has over 14,000 advisers, outlined its plans; among other forthcoming changes, Edward Jones will offer a transactional-based IRA under the BIC exemption. However, the firm will not offer mutual funds and ETFs to clients using those accounts, citing concerns about pricing to explain its reluctance to do so.

    “We certainly share the concerns that Edward Jones is raising in that there has to be consistency in the pricing structures,” Gremillion says. “But at this point we have not made any decisions similar to what Edward Jones has done.”

    Crowell says D.A. Davidson is still evaluating legal and business issues involved.

    “We haven’t made that decision yet because of the complexity of load structures, and pricing and break points,” Crowell says. “We’ve been working with our strategic partners to better understand what changes or share class they might offer so that we might continue to rely on their expert management. I’d say it’s a work in progress.”

    James Wiggins, a Morgan Stanley spokesman, declined to specify how much the New York firm is spending to be compliance-ready for the rule. “This is a very large regulatory change, requiring a commensurate, large commitment of attention and resources,” the spokesman said.

    Large wealth management firms, including Merrill Lynch, Wells Fargo Advisors and Raymond James declined to discuss how they were preparing for the rule and what compliance changes they may make. Several regional brokerage firms also declined to discuss the topic, citing the pressure of preparing for the rule.

    Although several lawsuits brought by business and industry trade groups, including SIFMA and the U.S. Chamber of Commerce, are still pending, few wealth management firms appear to expect any significant changes to the rule before it goes into effect next year.

    “Our sense is that little chance that much will change in the given time frame before April 10, 2017,” Gremillion says.

    ‘SIGNIFICANT EXPENSE’

    Indeed firms are marshalling tremendous resources to be ready for implementation.

    Gremillion, who has worked at RBC for the past 14 years, says that the firm has assembled a large team to evaluate the rule and map out the changes that will be needed. “This in aggregate around 100 individuals who have been engaged since the rule was initially published.”

    Gremillion declined to specify how much RBC was spending to prepare for the fiduciary rule. But she adds, “I can tell you that it is a significance expense. That translates into hard dollars.”

    RBC, D.A. Davidson and other firms have begun putting together webinars, conference and other initiatives to bring advisers up to date on changes wrought by the new regulation.

    “Initial activity includes educating advisors about the rule (in branch meetings and online) and asking them to review their books to understand where the impacts will be,” Wiggins, the Morgan Stanley spokesman, says.

    He adds that “As the rule is principles-based and not specifically prescriptive in what firms must do to comply, we are continuing to examine the implications for compensation, product suite, etc. and will make those decisions in due course.”

    Paul Pagnato, a former Merrill Lynch adviser and founding partner of PagnatoKarp, an RIA with $2.5 in AUA, says it’s become much easier for advisers to be fiduciaries.

    “When I started in the business, there was no choice. You bought and sold bonds or stocks and charged a commission. I didn’t have access to a platform,” says Pagnato, who started his career with Merrill Lynch in 1992.

    Pagnato sees the rule as both a boon to clients and an opportunity. PagnatoKarp, which is based in Reston, Va., recently recruited a new four-adviser team to serve as fiduciaries for clients with $1 million to $8 million in net worth. Pagnato expects a fiduciary standard to eventually be implemented for the entire industry.

    “This is just a step,” he says. “It will ultimately be for all assets. If you have a portfolio and you have $100,000 in the IRA and $100,000 outside the IRA, then why should the adviser be a fiduciary just in the IRA and not outside the IRA?”

    The Labor Department’s rule applies to retirement accounts, but wealth management leaders are examining whether to apply a fiduciary standard across all accounts.

    Gremillion says that RBC, which has over 1,800 advisers, is examining the situation.

    “There is a fair amount of work that is underway,” she says, adding that RBC feels “that the changes, while extensive, are in the right direction.”

    D.A. Davidson’s Crowell agrees.

    “Anything that puts the client at the center of the universe is important for our industry and for the credibility of the industry. We think it has some real strong benefits potentially,” Crowell says.

    Andrew Welsch

    Andrew Welsch is senior editor of On Wall Street.

    Originally Posted at Financial Planning on September 8, 2016 by Andrew Welsch.

    Categories: Industry Articles
    currency