Cannon Financial Institute

Preparing for Change: Our thoughts on the impending DOL ruling

Wednesday’s unveiling of the “Fiduciary Rule” will be the most significant regulatory change to the retirement industry since the passage of ERISA 42 years ago.

The impact to you and your firm is dependent on your segment channel. Cannon's Executive Chairman, Phil Buchanan states, “For some segments, the disruption will be severe, as it will change the nature of the retirement business and how people can be compensated. For other segments, there will be minimal adjustments. Yet, at the end of the day, every firm, regardless of channel will be impacted ---- and the impact will come from your clients.”

Buchanan continues, “The media pundits from CNBC, The Wall Street Journal, CFO Magazine, etc will flood various media outlets with responses that range from “kudos to concerns” and this will cause clients to ask questions like: “How will this impact my fees?”, “Have I been overpaying for services?” Cannon Financial Institute has been at the forefront of helping its clients formulate proactive communication strategies for major regulatory changes and geo-political crisis including:

  • 1986 US Tax Reform Act
  • 1994 Mexican Economic Crisis
  • 1997 Asian Financial Crisis
  • 2000 Dot-Com Market Collapse
  • 2001 U.S. Economic Growth and Tax Relief Reconciliation Act
  • 2008 Global Great Recession
  • 2012 United Kingdom Retail Distribution Review regulation
  • 2012 American Relief Act of 2012

The Fiduciary Rule will change the retirement landscape. Whether your landscape shifts significantly or not, you and your firm must be knowledgeable about the changes and to be prepared and proactive in client outreach to provide clarity. While the ruling is yet undisclosed, Buchanan offers three steps that must occur in the near term:

  1. Your firm’s legal and compliance areas will be forthcoming within hours or days of the DOL release as to their interpretation of the regulations and your firm’s position. You must be prepared to analyze this impact to your normal business practices.
  2. You must be prepared to anticipate the likely questions you will field from clients and prospects as to how the ruling will impact their retirement plans and any relationship they have with you.
  3. Perhaps most important, you must get out and talk to your clients, prospects, and influencers about how the Fiduciary Rule impacts end users of retirement services. You have to have a point of view. In times of ambiguity, your network needs to know that you are their advocate and you will keep them informed.

In the days to come, you can expect to hear more from Cannon on interpretations and recommendations in addressing the Fiduciary Rule. We stand ready to help you and your firms successfully enter the new era of retirement plan management. Change equals opportunity. When you couple this regulatory change with the subsequent media attention, your clients will be aware and will look to you for clarity. Your partners at Cannon Financial Institute want to help you seize the day!

Read More on this topic:

The Lack of Money is the Root of all Evil: Thoughts on new pricing models under the DOL ruling

Details about the DOL Ruling on the DOL website

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