(September 2020)

Generally speaking the wealth management industry has been fairly placid about the new fiduciary rule. The current version of the DOL rule is significantly watered down from the then-apocalyptic first version. It is mostly consumer protection groups who are fighting it. However, within the rule is a nasty surprise—for the insurance industry. Independent insurance agents are likely to be very harmed by the rule because they will become de facto fiduciaries, making their role significantly more complicated. Insurance IMOs (independent marketing organizations) will also become very complicated from a regulatory perspective. Ironically, this will likely benefit the wealth management space generally.


FINSUM + Magnifi: The rule is generally seen as a win for wealth management because it extends ERISA to 401(k) rollovers, letting financial advisors take some market share from insurance. 


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