Fred Reish and Brad Campbell Quoted by InsuranceNewsNet on DOL Fiduciary Rule
Benefits and executive compensation partners Fred Reish and Brad Campbell spoke to InsuranceNewsNet about the Department of Labor’s (DOL) aim to extend fiduciary duty to annuity sellers.
Even if the DOL loses in court again, the current rule proposal might be in effect for years before it is overturned, noted Reish. “It is entirely possible that this will go all the way to the Supreme Court,” he said. “In that case, advisers and agents, insurance companies, broker-dealers and investment advisers will have been covered by and in compliance with the new rules for several years.”
“Though paying lip service to the Fifth Circuit, declaring the new proposal to be more narrowly tailored, the reality is that the new standard would deem many recommendations to be fiduciary advice that the [court] ruled Congress did not intend to capture,” Campbell said.
Reish added that independent agents relying on PTE 84-24 to obtain paid commissions are in for the biggest change and will be the biggest fight.
In its bid to mitigate conflicts, the DOL is very narrowly restricting how independent agents can be paid, Campbell explained. He further noted that the only permissible compensation would be the upfront commission, the renewal fee and any trailing fees.