BISA Magazine - Quarter 2, 2017 - 13

R

on Insana believes the
Department of Labor's
(DOL) fiduciary duty rule
is history.

An executive order postponed the rule's implementation until
June, and it likely will be "left to die,"
he noted during his keynote address
at BISA's 2017 Annual Convention,
titled "Trump 2017: From Washington
to Wall Street." But the idea behind the
fiduciary rule - advisors acting in clients' best interests - may prove more
durable, Insana told BISA Magazine in
a subsequent interview.
We'll have to see if brokers go back
to a "suitability" standard, the CNBC
and MSNBC contributor said. Firms
like Merrill Lynch and J.P. Morgan are
already setting the bar higher and embracing the fiduciary standard (before
the executive order postponing the
DOL rule), the result mainly of pressure
from the marketplace, he said.
Last year, Merrill Lynch announced that
it would no longer offer new, advised
commission-based IRAs. J.P. Morgan followed suit in November 2016, after the
election of the regulation-averse Trump
administration.
Nor is the idea of a fiduciary standard
so radical. "I would always say put the
client's needs first," Insana said. It is
unlikely to hurt a brokerage firm's retirement business. Indeed, if an advisor
is allowed to earn 1 percent annually
based on assets under management,
that can easily become a self-sustaining
business model, he added.
Why did the industry push so hard
against the rule then? Fear of class-action lawsuits was a big concern, Insana
said. The rule's best interest contract
exemption attaches a fiduciary obligation to the financial institution itself,
including the potential for a classaction lawsuit against the institution for

Under the Trump administration, Insana
sees a stronger net position for banks
and financial services institutions
generally. Regulations may be loosened,
and banks may enjoy less stringent
capital requirements.
failing to meet its fiduciary obligations.
"The industry much prefers arbitration,"
he said, which is the likely alternative
to resolving client/provider disputes if
the DOL rule is scrapped.

margin products that were threatened
under the rule; those players may
receive a reprieve under the Trump administration. But that wasn't the main
issue with the rule.

Yes, some firms may have engaged in
aggressive pricing and generated high

Many advisors had feared they would
be pushed into offering the lowest

13
BISA Magazine



Table of Contents for the Digital Edition of BISA Magazine - Quarter 2, 2017

Table of Contents
BISA Magazine - Quarter 2, 2017 - Cover1
BISA Magazine - Quarter 2, 2017 - Cover2
BISA Magazine - Quarter 2, 2017 - Table of Contents
BISA Magazine - Quarter 2, 2017 - 2
BISA Magazine - Quarter 2, 2017 - 3
BISA Magazine - Quarter 2, 2017 - 4
BISA Magazine - Quarter 2, 2017 - 5
BISA Magazine - Quarter 2, 2017 - 6
BISA Magazine - Quarter 2, 2017 - 7
BISA Magazine - Quarter 2, 2017 - 8
BISA Magazine - Quarter 2, 2017 - 9
BISA Magazine - Quarter 2, 2017 - 10
BISA Magazine - Quarter 2, 2017 - 11
BISA Magazine - Quarter 2, 2017 - 12
BISA Magazine - Quarter 2, 2017 - 13
BISA Magazine - Quarter 2, 2017 - 14
BISA Magazine - Quarter 2, 2017 - 15
BISA Magazine - Quarter 2, 2017 - 16
BISA Magazine - Quarter 2, 2017 - 17
BISA Magazine - Quarter 2, 2017 - 18
BISA Magazine - Quarter 2, 2017 - 19
BISA Magazine - Quarter 2, 2017 - 20
BISA Magazine - Quarter 2, 2017 - 21
BISA Magazine - Quarter 2, 2017 - 22
BISA Magazine - Quarter 2, 2017 - 23
BISA Magazine - Quarter 2, 2017 - 24
BISA Magazine - Quarter 2, 2017 - 25
BISA Magazine - Quarter 2, 2017 - 26
BISA Magazine - Quarter 2, 2017 - 27
BISA Magazine - Quarter 2, 2017 - 28
BISA Magazine - Quarter 2, 2017 - 29
BISA Magazine - Quarter 2, 2017 - 30
BISA Magazine - Quarter 2, 2017 - 31
BISA Magazine - Quarter 2, 2017 - 32
BISA Magazine - Quarter 2, 2017 - Cover3
BISA Magazine - Quarter 2, 2017 - Cover4
http://www.nxtbook.com/nxtbooks/bisa/2017q4
http://www.nxtbook.com/nxtbooks/bisa/2017q3
http://www.nxtbook.com/nxtbooks/bisa/2017q2
http://www.nxtbook.com/nxtbooks/bisa/2017q1
http://www.nxtbook.com/nxtbooks/bisa/2016q4
http://www.nxtbook.com/nxtbooks/bisa/2016q3
http://www.nxtbook.com/nxtbooks/bisa/2016q2
http://www.nxtbook.com/nxtbooks/bisa/2016q1
http://www.nxtbook.com/nxtbooks/bisa/2015q4
http://www.nxtbook.com/nxtbooks/bisa/2015q3
http://www.nxtbook.com/nxtbooks/bisa/2015q2
http://www.nxtbook.com/nxtbooks/bisa/2015q1
http://www.nxtbook.com/nxtbooks/bisa/2014q4
http://www.nxtbook.com/nxtbooks/bisa/2014q3
http://www.nxtbook.com/nxtbooks/bisa/2014q2
http://www.nxtbook.com/nxtbooks/bisa/2014q1
http://www.nxtbookMEDIA.com