Broker-dealers eye level commissions to reduce risk under DOL fiduciary rule
Such a strategy is meant to reduce the appearance of a conflict of interest when using commission products in retirement accounts
Jul 11, 2016 @ 12:27 pm | By Greg Iacurci | Investment News
Broker-dealer executives are strongly considering a strategy whereby investment products with similar characteristics would have the same commission schedule as a way to reduce risk under a new Labor Department rule that raises investment advice standards in retirement accounts.
While the Department of Labor’s fiduciary rule allows brokerage firms and their advisers to receive forms of variable compensation, such as 12b-1 fees and commissions, some executives want to make commission payouts as similar as possible among like products to avoid the appearance of a conflict of interest when an adviser makes an investment recommendation.
Such a practice would be a departure from the way broker-dealers currently conduct business, whereby similar investment products could offer a fairly wide range of different commission payouts.Go Back
The well-attended Blue Vault session at the recent National Planning Holdings National Conference was very well received. The value of their products was evidenced by the volume of questions from the attendees. Stacy Chitty, Managing Partner, did an excellent job of explaining the history, strategy and value of Blue Vault data.