14 questions (and answers) about the DOL fiduciary rule

The DOL fiduciary rule was a hot topic at LIMRA’s retirement industry conference earlier this month in Boston. The association presented a panel about the rule during one of its general sessions hosted by Bob Kerzner, LIMRA’s CEO. Kerzner opened the session by predicting the rule will create seismic change throughout the industry.

“In my 43 years in the business, I cannot think of anything I think will have as broad an impact as what we will see over the next 3 to 5 years coming from the rule,” Kerzner said.

The panel focused on perspectives and predictions about the rule from the distribution, manufacturer and legal points of view.

The three panelists who participated in the panel were:

Jim Jorden, senior partner with Carlton Fields Jorden Burt LLP
Nick Lane, senior executive director and head of U.S. life and retirement products at AXA, and chairman of the Insured Retirement Institute
Scott Stolz, CFP, senior vice president of Raymond James

Kerzner posed a series of 14 questions to the panelists, ranging from predictions about the impact the rule will have on distribution, to how annuities will be affected and what legal challenges may be in the offing.

Continue reading to find out the panel’s thoughts and predictions about the rule. (Note: Some answers have been paraphrased for clarity.)

Bob Kerzner: First, I’d like for each of you to comment on any part of the regulation you find particularly interesting.

Scott Stolz: If you think about what the department’s really done here is they said, “You guys told us that you can offer and recommend products and get paid commissions and other revenue streams — some of which cost more than other alternatives, maybe pay more commissions or may be liquid or not liquid — and you can do all of that and still put the client’s best interest first, so we’re going to take you at your word and we’re going to give you a means to do that through the best interest contract exemption.” There are certain conditions with that. They’ve basically thrown down the gauntlet in my mind to be prepared to prove when somebody challenges you in court that you were able to do that, and that will cause huge changes in how we do the business and how we oversee it. Over the next 12 months, every firm is going to have to think about every time they recommend anything that pays more commission or more compensation than somebody else, how do they make sure it is indeed in the client’s best interest and how do they document that so that if they are ever challenged, or maybe more appropriately when they are challenged, they can prove that they put the client’s best interest first.

Nick Lane: I’ve gone through the three phases with this rule. I went through denial, then anger and now I’m at acceptance. I think the current version is moderately better than the original proposal. Within the rule I would say you have the good, the bad and then the unclear. But the most interesting part of this rule for me is they’ve said if you touch ERISA assets, you’re going to be a fiduciary. The first order of consequence of what it means for annuities or other products I think is pretty clear. It’s the second and third order of consequences that people are now discussing. Anything that operates in this domain, you’re going to have the debate of does that expose you to a fiduciary liability? When we go through our legal counsel they will say, “Well this is how the rule is written, but the real question is how is it going to be interpreted by a jury five years from now?”

BK: Jim, I think you had some strong opinions on whether the DOL overstepped what you might perceive as its legal rights and historic purpose?

Jim Jorden: I believe that they really stretched out well beyond any reasonable basis. I understand that as a practical matter, particularly after Dodd-Frank, there’s going to be a fiduciary standard that’s applicable throughout the industry either from the SEC or from the Department of Labor associated with the sale of investment products. That does not give the DOL the authority to create a brand new cause of action, which was done under this regulation, enforceable by the purchaser in state court and in arbitration. That particular step taken by regulation by a federal agency is beyond I think the authority they had — among other reasons why the rule has problems.

BK: Nick, over half of the retail annuity business is IRA rollover, so what’s your prediction about the impact of the rule on sales of annuities?

NL: We had publicly disclosed in the original ruling that it would be the worst-case scenario. We would now say it’s a moderate impact. I think it impacts anybody in the qualified space. The bottom line is the complexity is going to go up. Litigation is going to go up. The demand is still there though. And so people are going to continue to innovate to try to figure out how to tap that demand. I think in the short-term people are going to figure out how to use the Best Interest Contract (BIC) exemption. I think that’s a short-term solution, and I think in a long term, you’re going to see a lot of evolution and transformation in terms of the way these products are structured and how we meet those needs in new ways.

BK: Scott, it’s been hard to get independent producers to sell more annuities the last 3 to 5 years. How do you see this making your job even tougher to get retail producers to sell annuities?

SS: What we’ve seen over the past 12 months is a huge shift in our annuity mix. A year ago, 60 to 70 percent of the annuities we did at Raymond James were in the fixed and indexed category. Today that has completely flipped. Last month, only 33 percent of what we did was in the variable annuity space, and variable annuity sales over the past 3 months are down about 25 percent. I think that’s pretty much in line with what the industry is seeing overall, whereas both fixed and indexed product sales have more than doubled over the last 12 months. It’s more than just this rule in my view. I think there’s been a shift with investors toward more conservative investments, and every time the market goes down 10 percent, they seem to shift a little bit more. All of the momentum is clearly on the fixed and indexed side.

So, what happens now, particularly since indexed annuities have been moved out of PTE 84-24? Everyone’s going to find a way to utilize this BIC exemption so they can continue to sell products and maintain as much of the business model as they currently have. However what they are really going to have to think about is what is the advisor going to choose to do for new recommendations going forward? I believe the process we’re going to build around almost all IRA recommendations, regardless of the product, because of the differential compensation, is going to be very similar to the process we have today with 1035 exchanges, and that’s going to be a tremendous amount of hoops the advisors are going to have to jump through. It seems likely they’re going to say, “I’m not going to do this. Its not worth my time and the trouble.” Any advisor that does that will become a fee advisor only.

So then the question on the annuity side is, how much annuities can we sell if commissions are minimal and have to be sold in an advisory account. To date there have been no successful efforts with that, however to date there’s always a commissionable alternative. Once that commissionable alternative goes off the table for that advisor, how many annuities do they need to sell? The need is greater than it ever has been so I think there will be a stretch where annuity sales of all kinds drop dramatically, but as advisers get used to the new model, I think that annuity sales will come back particularly on the fixed and indexed side because if you take out the commissions the pricing gets better. The pricing the client is going to see on the contract itself will be better and should make it easier and more acceptable.

BK: As you think about RIAs, we’ve not had much luck as an industry getting those folks to sell annuities. Is there a way to make lemonade out of lemons here with new kinds of products with very different fee structures to open up the market to new producers?

NL: I think there was a premise going in that fee-based was going to be a little bit of a safe harbor, but fee-based is now going to be subject to BIC Lite. If you have any differential in compensation when you move it over, you’re going to have to explain why. So that’s a little bit of a caveat. I do think a lot of firms are discussing and beginning to think through fee-based. Most manufacturers have them. I think we’ve got the process but the demand wasn’t there.

BK: Jim, could you talk a little bit about the RAND Report, which certainly influenced DOL thinking.

JJ: The DOL commissioned RAND Corp. to do an analysis before they proposed the first rule. What’s interesting about the RAND analysis is it made two final conclusions. The first was there will be a substantial reduction in advisors as a result of this rule. The second was that after studying this rule, they couldn’t conclude as a matter of fact on any basis and by any measure whether the rule will be beneficial or detrimental to the investment purchaser.

Fast forward to the actual study. There’s extensive analysis of insurance companies and they go through the cost-benefit analysis and on the last page they say they know independent agents will be impacted by this, but they don’t have any data so they passed on the impact on independent agents. There was nothing in the RAND study that supports what’s happening to the independent agents and there’s certainly nothing in the study that the DOL has done.

BK: Nick, when you think about the BIC from a manufacturer’s point of view, which things do you see as most problematic?

NL: The BIC is a contract that allows the enforcement to actually be trial lawyers. In the original rule, three people had to sign — the client, the advisor and the firm. A lot of firms came out and said if they have a call center and somebody calls in, they’ll have to sign a BIC. If they call the call center tomorrow and speak to a different person on the phone they’re going to have to sign another BIC. So the DOL changed the definition of the BIC and said it’s between the client and the firm. That way, one firm can have multiple advisers all helping the same person.

The second thing that’s really interesting is what is the definition of a financial institution? The definition of a financial institution is an insurance company, a bank, an RIA and a broker-dealer. So as we think through it from a manufacturing standpoint, it’s really with the eye to who are our partners and who are our clients. AXA advisors are going to be the person signing the BIC. The cost of figuring out those processes, procedures and systems is taking a lot of effort.

Our concern is I’ve got 690 other partners, and we’ve had a lot of convergence in the industry in the back office to create efficiencies, but you could conceivably come up with 690 different versions where they’re calling on you as the manufacturer saying I want this type of information. If a consumer owns your annuity and they call the manufacturer and want to change their asset allocation, the liability sits with the broker-dealer. You’re going to have to give me that information. I think we’re going to move through a little bit of a period of divergence where people are going to come up with different systems and different processes, and manufacturers are going to have to figure out how they support all those different models.

The second question is what about all the revenue shares between manufacturers and distribution platforms. How are people going to treat that? Clearly being on both sides, the distribution companies are going to say we want one level fee from all of our revenue-share partners, and guess what? We want the highest fee. And the manufacturers will say we also wnt one level fee and we want the lowest fee. That’s part of doing business. If you’ve got proprietary, you’re tied and you can affect how people are going to do business. If you’re doing it through third-party, you’re going to actually have to think about supporting many different models and there’s going to be some decisions if it’s still economic based on the way you have to support the business.

BK: Scott, from the distribution side, which parts of the BIC concern you the most?

SS: I mentioned earlier the similarities to 1035 exchanges and gave examples to clarify why I feel that way because I think it’s a good example. If you think about how we got to where we are with the 1035 exchange processes it came from regulators, primarily with FINRA concerned that too many 1035 exchanges were being done and motivated because of the new compensation the advisor would get for moving from contract A to contact B. FINRA never said “Here is what you need to do,” they simply said “You need to make sure that that transaction as in the client’s best interest.”

Over years, every distributor and to some extent the manufacturers, came up with this process that was kind of agreed upon and was refined over the years based on FINRA audits and fines. This is going to be the same process we’re going to go through here. Anytime an advisor is going to make a recommendation for an IRA where they’re going to get more compensation versus something else that a prudent person would believe that something else would make sense at a lower compensation, we’re going to need to document why this made sense — the pros and cons and what are the costs. All of that will have to be presented to the client and signed off on, and then we’ll have to keep that so that if years down the road someone says you didn’t do this right, you don’t end up in court.

The difference is now we’re not talking about just an annuity, we’re talking about anything that there is a recommendation where there is differential compensation, and that is going to create such a huge oversight burden. In the short term with the BIC exemption, to the extent that firms decide to use it, the biggest issue is going to be how do I manage this process and how do I justify the differential compensation?

See aso:

Final DOL fiduciary rule: A bane or blessing for advisors?

BK: Nick could you spend a minute digging into BIC Lite. We all thought it was going to be simple and we’d just migrate to fee-based, but how did the BIC Lite sidetrack that?

NL: The original rule didn’t mention differential compensation. Now they say you can have differential compensation. They just don’t tell you how to do it. So when you talk about differential compensation, when you talk about reasonable compensation, when you talk about proprietary products, there’s clearly language in the rule that says you can do it, it just doesn’t give you explicit instructions on how. If you are an optimist, you say I know I can do it. I’ve got to be innovative. If you are a pessimist you say it’s going to be really hard. There was a premise from the DOL that said from a high level, we need to do something to better protect consumers. We have this great regulation, we protect consumers when they’re in their IRA, they’re getting institutional pricing and they’re getting fiduciary protection. And then some firm calls them up and enrolls them into an IRA and they’ve got the same product and now they’ve got retail pricing and they don’t have fiduciary protection.

JJ: I’d also say there’s two other issues with BIC Lite. One is under the rule, if you move to a fee-based level fee, you avoid all of the contract disclosure, all those requirements that would be otherwise applicable. However the rule does require that you give the person who you are making the sale to a signed statement that you are a fiduciary and that you will comply with the impartial conduct standards. The impartial conduct standards are twofold. One is the duty of loyalty prudence, which is the prudence standard. You’re still going to be subject to that. The second is that you are subject to the reasonable compensation standard. So you haven’t avoided those two standards even under BIC Lite. It’s quite a bit better, from the standpoint of what the administrative requirements are, but the substantive requirements are not significantly different.

SS: Today we kind of price things based on the product. Equity funds pay one commission, bond funds pay another, short-term bond funda pay another, variable annuities generally pay one commission, fixed annuities pay a little bit less. It’s all based on the product. Going forward it appears that from the way the rule is written that compensation is going to be based on the service provided and how complex the product is will play into that, but it can’t be solely based on the product. You won’t be able to justify an equity fund paying more than a bond fund. I don’t know how you can justify one variable annuity paying one commission and another paying another commission. So each firm is going to have to, even under BIC Lite, go through their process to determine here are the services we’re providing and here’s what we think is a reasonable compensation exchange for that service, and that in itself has the potential for repricing the entire industry.

NL: I think one of the things the industry has done a really good job of is when you think of cost to the consumer, think of the cost of the advice and don’t equate that with the cost of the guarantee. One of the big wins for the industry was they said if you are getting an income benefit or a death benefit, that has a cost. That’s different than what is the cost of the advice that’s being provided, so clearly it’s a very different value proposition between the passive equity fund and an insurance product. I think with insurance products, with more features and functionalities, you can make a documented case that this is the value of what you’re paying for. What you need to do is document, if the advisor is getting paid a different commission, the amount of effort and time. You better have a documented case that it takes me six times as long to sell an annuity and explain the benefits, and I provide X, Y and Z in service, if you’re going to pay a higher commission rate than with a passive equity that takes 30 minutes to sell.

BK: Jim, plaintiffs bar has to be dancing in the street when this was written, can you talk a little bit about that?

JJ: I was brought here to frighten the hell out of you guys. Under the BIC, the contract is entered into between the financial institution and the customer. It may require that any claim under this new cause of action be arbitrated. However it cannot deny the person the right to bring it as a class action, so either as a class arbitration or in court, you could be facing class actions.

Under the impartial conduct standards, namely the prudency standard, which has special language that says you must make the sale without regard to the compensation you are receiving, there’s absolutely no description of what that means. There were a lot of comments asking the DOL to be more specific. Obviously if someone makes a sale, it can’t be without regard to the compensation they are going to be paid. The DOL refused to provide any advice whatsoever as to that issue.

The second point is reasonable compensation. Your compensation has to be reasonable. Once again, the DOL was asked to give some standards on that and they refused to do it. The only thing they offered up was maybe we can get an independent third party to give you an opinion as to whether the compensation you are getting in this transaction is reasonable.

So start with those two concepts and then you move to all the requirements under the BIC. The disclosure requirements, policies and procedures that are required to be undertaken are extensive. This is fodder for class actions, which you can well imagine. The question of whether you fail to disclose something that might have impacted a particular person’s decision to purchase or the extent of the compensation you are receiving looks to me like open field for what the securities class-action law currently does in securities litigation. It’s not a far cry from that.

The difference here is that there is a contract that not only requires you to do these things but has a provision that says you warrant to the customer that you will do these things. So you have a warranty and the act of disclosure, and you have the obligations. Yeah, it’s an open field. The problem is the DOL could have provided certain standards saying essentially if you meet these standards then you’ve met the requirements under the rule, but that I think is one of the great problems with the rule as written.

BK: Scott, as you think about how advisors will be giving advice, what are the implications and how do you think it will be different? Will there be less discretion in some ways because more will have to be documented?

SS: I think advisors that solely do investment recommendations are going to find it very difficult to continue to do that at anywhere near the level of compensation they have today. If there’s one thing that seems pretty clear, no matter where you stand on this robo-advisor thing, technology is going to drive down the cost of investment allocation services. And the ability to charge even on a fee-based structure a percent or more when that is all you are doing is going to probably be obsolete before too long.

That creates an opportunity for advisors who really look after the whole financial well-being of the client. But it wouldn’t surprise me if the model gets down to something like, I’m going to charge you 30-40 basis points on the assets for the investment allocation piece, and if that’s all you want me to do, that’s all I will receive. But then I’m going to charge you perhaps by the hour for everything else, or a monthly maintenance fee that gives you the ability to call me to help with college planning or retirement planning, or advise you whether to buy or lease your car — all of those things that in the industry today we wrap all of the compensation into this investment allocation piece and we basically give everything else away for free. That’s why the advisor says I do all these things, I’m completely worth 1.5 percent per year. That’s not how we portray it in the industry, so the price is going to have to get much more specific based on the service that the advisor provides, and those who can’t do that are going to find it very difficult going forward.

BK: Nick, how do you see it?

NL: I’m going to bring this to the 30,000 foot level. The consumer protection is just the beginning. The real question this country faces is what’s the future of retirement? Retirement is a relatively new concept. It only came around maybe in the 1950s, this notion of I work, I stop, I don’t work. Consumers are now going through different cycles. Their work-life patterns are changing. They are living longer, and they need more money. So the real question is how do we get more people to participate? When I was down in D.C. giving constructive feedback of how to improve the rule, both sides of the aisle talked about what the new public-private sector partnership is going to be for retirement because it’s clear we’re facing a crisis if we stay on the current course. I think that’s the conversation we’re going to be having over the next 3 to 5 years, and I think that’s going to affect the role advisors play in a much different way than what I would say is this first stage of enhancement to consumer protection. If you went back 30 years ago and said, let me tell you what 2016 looks like with 1035s and disclosures, etc., advisors would say I’m outta the business. Well they are here today, they are doing well, there’s always a good demand for great advisors, there’s always demand for great firms, so I think if I look forward into the future, what is going to be the new public-private retirement scheme is the next big question people in this room need to get involved in.

BK: Jim, we’ve skirted over the issue, but many life producers went to FIAs, dropped their registration and didn’t want to be bothered with the SEC world, which some found oppressive. But ERISA, which is now what is impacting the RIAs, is really very different. Can you talk about a couple of those fundamental differences?

JJ: If you are asking how does this proposal affect the FIA marketplace, most of the FIA writers have pretty strong broker-dealer relationships, probably at least 50 percent maybe more of their sales are through the BD system, so they’ll go the route of whatever the broker dealers go in all likelihood, because the BDs will be the financial institution. Remember, the rule says one of the entities that can be a financial institution is an insurance company, so there are two insurance company situations that are impacted in a somewhat unusual way. One is when the company itself is proprietary and the other is companies that sell maybe only FIAs or a significant amount of FIAs, because the question of whether you can be the financial institution for agents who are not registered with a broker-dealer raises some very different and difficult questions. Where do the IMOs fit in this whole process? There’s some discussion that some IMOs should become financial institutions. If you look at the rigors of becoming a financial institution, they’d have to go and get an exemption because they are not defined as such. They’d have to prove their ability to be a financial institution, that is to supervise the underlying advisors, and the question would become do the advisors have to become state-licensed RIAs, or what would they be under those circumstances? I can’t answer all those questions but they certainly are legitimate and significant issues.

Bob: We talked earlier about the change in the rule that says the BIC is between the company and the client. Nick, do you think companies are going to be willing to take on that risk, to in essence do the IMO model like they have?

NL: In the original draft before it was final, FIAs were strategic. They were a way to continue to provide the service. It was a less-complex regulatory regime. Now that they’re in the BIC, it gets interesting. There are only four classes that are deemed a financial institution — insurance companies, broker-dealers, RIAs and banks. IMOs aren’t deemed to be a financial institution. They have to apply to become a financial institution. The BIC has to be signed between the client and a financial institution. The IMO doesn’t count. They have to actually petition the DOL to ask to be a financial institution.

Where a lot of us thought there was going to be a little bit of a safe harbor now has a lot of changes to the dynamics. So if the IMO doesn’t sign the BIC, the manufacturer will have to sign. Will XYZ manufacturer be willing to state it has supervisory procedures in place to ensure a non-registered advisor that’s independent is doing business appropriately? I don’t see a lot of manufacturers doing that.

JJ: The problem with that is that the IMOs traditionally have advisors that are selling for more than one company. So if you’re a company that wants to be the financial institution that’s supporting this particular IMO, that means you are going to ensure that the sale by the advisor down the line is good for your product and is also good for your competitor’s product. That’s really the step back that’s going to be required. Possibly some people will go back to the DOL and try to get some guidance on this issue. That wouldn’t surprise me at all and would be something that I would encourage people to do, because clearly the DOL didn’t think through the implications of what they were doing on this issue.

BK: Scott, do you think there is going to be a need for change in how products are designed in particular for the VA space and especially as it relates to commission vs. fee?

SS: At Raymond James, we haven’t made any final decisions about this, so this is merely me speculating. I know I’m going to have advisors who are going to decide to use this BIC Lite as a level fee fiduciary status, which means that it’s level for them and the firm. That means there can be no commissions, there can be no revenue sharing, etc.

We’ve already told all our insurance companies, be prepared to design two types of products. One, we’re going to need products that fit under this level-fee fiduciary arrangement. Give us one with no commission and no surrender charge. And then give us another version of the same product that has no commission but has some early withdrawal fee thereby giving the insurance company the ability to make the pricing of the product a little bit better.

Assuming advisors are going to use the BIC in some cases, then we need to keep all the products we have today, but each firm is going to go through the process of looking through the compensation on all the products they have and decide if it’s reasonable. And my guess is they’ll go back to the insurance companies with product requirements. I’m sure Nick’s concern is he’s dealing with 690 distributors, and he’ll end up with 300 different requests as we all determine what is reasonable. I think that fear is well founded.

Life insurance

Bob: Nick, on the proprietary side of the house, you have producers, as you think about the implication on those who’ve sold predominately life insurance and annuities, but a big hunk of their business might have been IRA rollovers. What do you see as the implications to them on the future sales of life insurance and could that be impacted, perhaps even favorably?

NL: This is one of the reasons we advocated so hard. I wanted to be able to look our advisors in the eye and say this is going to be a great place for you to bring your daughter or son in too, and you can collectively serve your clients. There’s been convergence. Most advisors are doing some life insurance, some wealth management either through a practice model or joint work, especially in rural areas where if you are serving a small town you’ve got to be able to serve the entire market. So I think to a certain degree there are some positives.

On the distribution side, you always sort of complain about compliance. Now if you have a strong compliance and infrastructure to manage the complexity of living in an SEC fiduciary and DOL fiduciary world and you can support your advisors and stand behind it, you can help them stay in business. I think firms are saying, how do we come up with those processes? Costs are going to go up, but if we can leverage technology, there are 300,000 registered advisors in the US today, there’s 300 million people. That’s one for every 1,000 people. I think that gearing ratio has to go up.

So you do hear from some advisors that say I’m just going to sell my practice; it’s getting too hard. I think there will be some that say they don’t want to touch qualified plans, but this is where I think competition is good. I think people that say they want to be able to serve wealth management and provide for insurance needs and are going to be the best platform out there, are going to be forced to actually deliver that value proposition.

JJ: I’m going to say something positive about the rule. It forces advisors to get more education both with respect to the product they are selling, and with respect to the investment community in general. It forces them to do that, and that, in the end, can’t be a bad thing.

SS: I’ll add something else positive. It will be a painful couple of years going through this, but anyone left standing at the end is going to be in a much better situation. Firms like ours that are bigger and have the resources to meet the rule and have all the supervisory procedures in place, it will be way easier for us to handle the rule than other firms. Smaller firms are going to have an issue, but like anything else, there’s going to be winners and losers. At the end, those who are still in it might say, hey it wasn’t that big of a deal.

See also:

The ABCs of the DOL fiduciary rule

BK: Do you think there will be as many smaller BDs as there are today?

SS: It’s hard for me to see how there would be If it costs us with 6,500 advisors say $30 million. Just because you’ve got 500 advisors doesn’t mean you spend one-twelfth the amount of money. You probably still have to spend close to $30 million. I don’t know how smaller firms will have the resources to do so and the more heavily they are weighted toward brokerage commission type arrangements will make it even harder for them going forward.

BK: Jim, what do you think’s going to play out on the legal front?

JJ: I certainly expect that there will be litigation challenging the rule. I may be wrong because everyone is trying to take a step back. As I said at the outset, everyone has said we can accept the fiduciary concept but you’ve got to make it workable. This rule is not workable in many different respects. It may have lofty ambition, but it’s just not workable. I think there’s going to be some challenges to the rule along those lines. There are various reasons for challenging the rule and I’d be very surprised based on what I know is going on right now if there won’t be a challenge.

BK: Nick, as chairman of IRI, what do you think is left for advocacy or legal fronts ahead?

NL: Both Scott and I testified at the DOL panel and I think our premise is constructive feedback. We are for the spirit of the rule, but there are some unintended consequences.

Obviously there’s the politics and the policy. This is not a political issue. It’s what’s the right way to make sure in the goal to get better advice we don’t eliminate advice to the lower and mass market, and that’s the hidden concern. There’s going to be an advice gap and there’s going to be a distribution gap for those people who need it most.

There are a lot of good reasons to say the DOL is overstepping its bounds. I think that’s why we have trade associations, so they can represent the industry and consumers. I know there’s concern out there. You’ve got to stand up and you’ve got to say this is what’s right and do it in a constructive way, and do what’s in the best interest of the consumer.

It’s an interesting time. The banks clearly have gone through this cycle and feel that they’ve been tarred and feathered. It’s a little like Jerry Maguire. You say you are going to do it, and everybody claps and then takes a step back, but I think this is where the industry and the trades for a lot of valid legal and procedural issues need to actually help drive some clarity. Because having an SEC standard and having a DOL standard is by definition going to make this really hard to do business. I think we could all live with one standard, and I think the industry will continue to push for it.

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