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SEI, Redtail Launch DOL Fiduciary Action Plan

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With less than six months to go before advisors have to comply with the first deadline of the Department of Labor’s fiduciary rule, advisor partners have announced a flurry of integrations and partnerships designed to make the compliance process as smooth as possible.

SEI and Redtail are the latest example of firms joining forces to help advisors manage their new compliance burdens. They announced on Wednesday a package of workflow diagrams and templates to help firms determine their readiness to comply with the fiduciary rule, and a step-by-step guide to help them follow through on the rule’s requirements.

“I’ve attended more seminars and webinars, and I’ve read many things, and it seems everyone wants to talk about the law itself. No one really wants to talk about what an advisor should do,” John Anderson, managing director and head of practice management solutions for the SEI Advisor Network, told ThinkAdvisor on Wednesday. “If I’m an independent advisor and I’m waiting for someone to say something – I’ve got less than six months to comply with this rule.”

He noted that prior to the rule, the DOL’s focus was mostly on disclosure. “As long as you disclosed things, you could pretty much do whatever you want,” he said. “Post DOL, you’re going to see a lot more about reporting and you’re going to see a lot more about proving you did what was right.”

The DOL Workflow Toolkit uses four workflows to direct firms through different scenarios, and an action plan to help them respond to each client’s situation. The first step is a strategy session that should take about a month to work through, Anderson said.

“The idea was to create a set of workflows in a manual form or a diagram form for advisors who want to use this as a one-off,” Anderson said. “Or even better, to incorporate that into Redtail’s technology so it becomes an automatic function that lives in your CRM.”

Redtail and SEI wrote the workflows broadly enough so that firms can “still incorporate [them] if your broker-dealer has a preference one way or the other. We wrote it broad enough that if there are some modifications of the rule, or there are some clarifications of the rule, that you can still” use the workflows, according to Anderson.

Anderson said that in developing the workflows, they came up with an acronym — BASE — that forms the basis of the workflows.

First, “bone up on the law. Understand how it affects you, how it’s going to affect your compensation, where you’re at risk with regard to the law and how you’re going to comply.

“Audit your book of business,” he continued. “Take a look at the individual accounts, the qualified accounts, and see which individual clients are affected.

“Segment those clients by the ones you think you can move, the ones you are going to have to move and the ones that you unfortunately may have to [orphan].”

Finally, “execute on that” plan.

David Mehlhorn, director of sales at Redtail, said, “A lot of advisors aren’t really sure what they need to do or how to approach it. SEI did an awesome job putting together the workflows and the plan, and we wanted to give the advisors the tools to be able to put that into effect.”

Mehlhorn said the package is available to all advisors, including those who aren’t Redtail or SEI users, although Redtail users will be able to access it through their CRM.

“If we’re going to build it, we can’t be selfish about it,” Anderson said. “We have to make sure it’s out there for everybody.”

“Both companies wanted to step up and be someone who’s out there that’s starting to give direction in actionable ways,” Mehlhorn said. “April’s going to come quicker than people realize. I go to conferences and nine of the 12 sessions on the agenda are all DOL something, and I still have advisors coming up to asking, ‘So what are you guys doing to help me with the DOL?’ People just don’t know where to start.”  

— Read DOL Releases FAQs on Fiduciary Rule on ThinkAdvisor.


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