DOL Compliance: A Two-Part Process?

DOL Compliance: A Two-Part Process?

Posted by Tracie Hummel on Oct 12, 2016 9:09:06 AM
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wall_street.jpgLast week, Merrill Lynch announced that it would eliminate all commissioned IRA accounts in response to the DOL fiduciary rule. Only time will tell if other firms take such drastic measures to comply with the new legislation. In any case, the DOL fiduciary rule brings with it numerous challenges and raises two critical questions:

  1. How will firms remediate existing accounts to comply?
  2. How will firms change their procedures and products to ensure accounts opened in the future comply? 

Regardless of how firms decide to approach the second question, they will need a way to remediate existing accounts that may not be in compliance. In the example of Merrill Lynch, the Merrill advisors and operations staff will need a solution and process for resolving all existing commissioned IRA accounts. Even though it's clear that Merrill will no longer offer commission-based accounts in the future, current clients with brokerage accounts will have to work with their advisor to ensure their accounts are in compliance. According to one Wall Street Journal article, they will either need to close the account or leave the account unchanged without the option to receive advice or make significant changes.

The recent Merrill Lynch announcement is a good reminder of the complexities of not just the fiduciary rule itself, but what is required of firms and advisors to comply. A technology solution such as our DOL Advisor Toolkit can simplify the process of compliance, bring transparency to it, and provide crucial audit trails to prove compliance. Download our DOL Advisor Toolkit demonstration webinar by clicking the button below to see how it works:

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Topics: DoL

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