BOSTON — One of the big remaining questions associated with life under the Department of Labor fiduciary rule is where IMOs fit.
The question came up Thursday during the 2016 Retirement Industry Conference hosted by LIMRA. The fiduciary rule places liability upon four designated financial institutions: banks, registered investment advisors, broker/dealers and insurance companies.
But insurance marketing organizations perform a lot of key roles as middlemen between manufacturers and clients. Jim Jorden, a panelist on a fiduciary session, said many people think IMOs should be considered financial institutions. But under the rule, they would have to petition the DOL to receive that designation.
A shareholder of Carlton Fields Jorden & Burt in Washington, Jorden said the IMO quandary is one of many situations the DOL did not think through in crafting the rule. The broad requirements of the Best Interest Contract Exemption, for example, leave advisors vulnerable to class-action lawsuits, he said.
The rule was published April 6 and opponents have 60 days to ask a federal court to grant an injunction to stop it, Jorden said after the meeting. A couple of industry groups reportedly are preparing legal action, he added.
The U.S. Chamber of Commerce “is going to bring litigation,” said Nick Lane during the panel session. Lane is senior executive director and head of U.S. life and retirement at AXA.
They were joined on the panel by Robert Kerzner, LIMRA president and CEO, and Scott Stolz, senior vice president of Raymond James.
Raymond James has instructed manufacturers to “be prepared” to deliver two different annuities — fee-based and commission-based — depending on which direction the company goes, Stolz said.
While the panel was bearish on the fiduciary rule contents, Lane sounded a positive note when he noted the opportunity that remains in the retirement market. There is always a strong demand for good advisors, he said.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at email@example.com.
© Entire contents copyright 2016 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.