Insurance Friendly RIA Steps Up to Sign BICE for DOL
Would you like to learn about an RIA (Registered Investment Advisor) that will be signing the BICE for advisors it works with? Click on the following link to learn more and/or to sign up for a WEBINAR on Thursday November 10 at 1:00 p.m. EST.
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The financial and insurance industries are in absolute turmoil as we all wait for the DOL fiduciary regulations to take effect in early 2017.
Series 7 licensed advisors are now going to be fiduciaries when it comes to giving advice to clients with money in IRAs and qualified plans.
Insurance only licensed agents are freaking out because of the new and substantial requirements they have to follow if they are going to sell fixed products to clients who have money in IRAs or are rolling money from a 401(k) to an IRA.
BICE Hurdle-one of the biggest issues at hand is who is going to sign the BICE (Best Interest Contract Exemption) when a commission based product is sold in an IRA?
FA magazine had a nice summary on the exemption:
The exemption will permit firms to use many of their current compensation models as long as they acknowledge their fiduciary status, give prudent and impartial advice, disclose potential conflicts of interest and information about their revenue model, avoid misleading statements and receive no more than reasonable compensation.
Who will sign the BICE?
This is the big question right now in the insurance industry. There are tens of thousands of non-securities licensed advisors who need a financial institution to sign the BICE so they can sell fixed products to clients in their IRAs.
Several IMOs (Independent Marketing Organizations) have filed to be deemed “financial institutions” so they can sign the BICE on behalf of insurance agents who sell product through their firms.
But most IMOs in the industry have not filed for and probably won’t file to become financial institutions (which means agents will have a very limited menu of IMOs they can work with).
I’ve been told that most insurance companies who can sign the BICE will choose NOT to do so.
What about RIAs and Broker Dealers?
Broker Dealers CAN sign the BICE, but the question is, will they? Most B/Ds have no interest in their advisors selling fixed products so it will be interesting to see what they will do. Some have come out and stated that in 2017 their advisors will no longer be able to sell commission based products in IRAs/qualified plans.
I’ve not really heard much from any large RIAs. I’ll be interested to see what they do.
One RIA will be signing the BICE
There is one RIA that specializes in working with advisors who like to sell fixed products (FIAs) and this RIA will be signing the BICE for advisors it works with.
That RIA is POM Planning (www.pomplanning.net).
To learn more about POM Planning and how it will deal with signing the BICE for advisors it works with, click on the following link: http://strategicmp.net/ria-to-sign-bice.
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