Steve Leimberg: The National Association for Fixed Annuities v. Thomas E. Perez, Secretary of the United States Department of Labor

Reprinted Courtesy of Leimberg Information Services, Inc. (LISI) at http://www.LeimbergServices.Com

“When advisers choose to give advice to retail retirement investors pursuant to a conflicted compensation structure, they must protect their customers from the dangers posed by conflicts of interest.”

Steve Leimberg provides members with his analysis of The National Association for Fixed Annuities v. Thomas E. Perez, Secretary of the United States Department of Labor, et al.

Steve Leimberg, Publisher of Leimberg Information Services, Inc. (LISI) is co-author with Howard Zaritsky, of Tax Planning With Life Insurance, and creator of NumberCruncher Estate and Financial Planning Software.  A frequent speaker at estate planning councils on life insurance and professional marketing, Leimberg is the creator/author/editor of The Tools and Techniques series including The Tools and Techniques of Estate Planning (17thEdition)The Tools and Techniques of Life Insurance Planning (6thEdition)The Tools and Techniques of Employee Benefit and Retirement Planning (14th Edition)The Tools and Techniques of Income Tax Planning (5th Edition)The Tools and Techniques of Financial Planning (11th Edition)The Tools and Techniques of Charitable Planning (3rd Edition)The Tools and Techniques of Investment Planning (3rd Edition),  The Tools and Techniques of Estate Planning for Modern Families, and Life Settlement Planning.

Here is his commentary:


The National Association for Fixed Annuities (“NAFA”) sued the Department of Labor challenging three final rules promulgated by the Department of Labor on April 8, 2016.  These three rules (the first implementation date is April 10, 2017 and full implementation is January 1, 2018), substantially modify the regulation of conflicts of interest in the market for retirement investment advice under the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code. NAFA focused its challenge on how the new rules will affect the market for the fixed annuities that its members sell.

NAFA challenged the new rules on four major grounds:

(1) The new definition of “fiduciary”—and, in particular, the DOL’s decision to drop the “on a regular basis” condition—was beyond its authority in extending ERISA fiduciary duties to IRAs and other plans that are not subject to title I of ERISA.

(2) The BIC Exemption impermissibly creates a private cause of action and that the condition contained in the BIC Exemption limiting compensation to a “reasonable” level is void for vagueness.

(3) The DOL’s decision to move fixed indexed annuities from PTE 84-24 to the BIC Exemption was arbitrary and capricious.

(4) The DOL’s regulatory flexibility analysis was inadequate.

But the Court denied NAFA’s motions for a preliminary injunction and summary judgment and granted the DOL’s cross-motion for summary judgment.


Annuities fall into three general categories: variable annuities, fixed indexed annuities, and fixed rate annuities. NAFA represents insurance companies, independent marketing organizations, and insurance agents involved in the sale of fixed annuities.

A “variable annuity” is “an annuity that makes payments in varying amounts depending on the success of the underlying investment strategy.” Essentially, a variable annuity is both an insurance product and a security. Because the “underlying assets are held in separate accounts with a variety of underlying investment options such as mutual funds,” the customer can benefit from “the realization of market returns.” The downside is that future income payments are “not guaranteed,” and the customer “makes or loses money depending on the performance of the chosen investment options and the contract value.”

A “fixed rate annuity,” offers “a guaranteed level of return that provides a guaranteed and predictable level of income.”   The annuity contract “may provide a guaranteed interest rate for the life of the annuity or may allow the insurer to reset the interest rate periodically but no more than once every twelve months, protecting the owner against loss due to investment or market risk.”

A “fixed indexed annuity” bears attributes of both a variable annuity and a fixed rate annuity. Its rate of return is based on “an external market index, such as the S&P 500,” but it also comes “with a guaranty that the rate will never fall below zero.” Although fixed indexed annuities do “not directly participate in any security investment,” as with securities, there is a variability in the potential return that results in a greater risk to the purchaser” than posed by fixed rate annuities. Fixed indexed annuities inherently bear more risk as the trade-off for more potential return.  Compare this to a fixed rate annuity which provides less risk of loss of capital but may offer less potential return than a variable annuity.

NAFA represents entities involved in sales of both fixed rate annuities and fixed indexed annuities. The three new rules NAFA challenged have significant implications for those involved in the sale of these products—and, in particular, for fixed indexed annuities—for three reasons:

(1) Both fixed rate and fixed indexed annuities “are often purchased as a funding vehicle for IRAs. Purchases made in IRAs, in turn, receive significant tax benefits and, more importantly, IRAs constitute “plans” for purposes of title II of ERISA.

(2)  Almost all annuities today are sold based on commission compensation. This is significant because payment or receipt of a commission may trigger the prohibited transaction rules.

(3) The new regulations subject fixed indexed annuities—but not fixed rate annuities—to certain more stringent regulatory requirements. These additional requirements are discussed below.


ERISA: The Employment Retirement Income Security Act of 1974

Title I of ERISA regulates retirement plans established or maintained by employers, unions, or both. It contains detailed reporting and disclosure requirements, rules relating to vesting and funding, fiduciary responsibility requirements, various enforcement rules, a private cause of action, and a broad preemption rule.

Title II of ERISA principally addresses the requirements that plans must fulfill in order to qualify for certain tax advantages, includes a prohibited transaction rule. Title II contains a definition of “fiduciary” that parallels the definition found in title I. Title II sweeps more broadly than title I in this respect: In addition to covering plans established and maintained by employers, title II applies to IRAs and other plans not subject to title I.

This case lies at the intersection of ERISA titles I and II:  The issues focus on the overlap and interplay between the following provisions of titles I and II:

Title I of ERISA

Thou Shalt – Thou Shall Not

Title I of ERISA applies to “any employee benefit plan if it is established or maintained” by an employer, by an employee organization, or by both. One of the principal ways title I protects the assets of employee benefit plans is by imposing “fiduciary” obligations on individuals who perform certain functions on behalf of a plan. Under Title I, a person is a “fiduciary” with respect to a plan if he/she renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so.

A fiduciary of an ERISA employee benefit plan must

“discharge his duties with respect to the plan solely in the interest of the participants and beneficiaries ... for the exclusive purpose of: 

  • providing benefits to participants and their beneficiaries; and 
  • defraying reasonable expenses of administering the plan.” 

Additionally, Title I of ERISA requires that a fiduciary act

“with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims,” including by “diversifying the investments of the plan so as to minimize the risk of large losses.” 

Together, these duties are referred to as the duties of loyalty and prudence.  A fiduciary who violates these duties is “personally liable” for any losses to the plan stemming from such a breach, and he may also be “subject to such other equitable or remedial relief as the court may deem appropriate.”

Title I creates a private cause of action permitting plan participants and beneficiaries to (1) enforce this right, (2) to recover lost benefits, and (3) to enforce the terms of the plan.  It also empowers the Secretary of Labor to bring suit “for appropriate relief” or “to collect any civil penalty” for violations of certain provisions of the Act.  Title I also forecloses other remedies by preempting a broad range of state law claims “as they ... relate to any employee benefit plan.”

Title I also “supplements the fiduciary’s general duty of loyalty to the plan’s beneficiaries ... by categorially barring certain transactions deemed ‘likely to injure the pension plan.’ Under this “prohibited transaction” rule, a fiduciary may not

  • deal with the assets of the plan in his own interest or for his own account
  • in his individual or in any other capacity act in any transaction involving the plan on behalf of a party (or represent a party) whose interests are adverse to the interests of the plan or the interests of its participants or beneficiaries
  • receive any consideration for his own personal account from any party dealing with such plan in connection with a transaction involving the assets of the plan
  • cause a plan to engage in certain transactions with a “party in interest”—a category which includes the fiduciary himself, the employer sponsoring the plan, and persons providing services to the plan.

Exceptions and Exemptions:

The “prohibited transaction” rule, however, is subject to certain statutory exceptions. The Secretary of Labor is authorized to grant additional exemptions if that exemption is “administratively feasible,” “in the interests of the plan and of its participants and beneficiaries,” and “protective of the rights of participants and beneficiaries of such plan,”

Title II of ERISA

ERISA’s Title II sets rules for the taxation of employee pension plans, IRAs, and certain plans not subject to title I. Title II applies to IRAs and other plans that are not established or maintained by the beneficiary’s employer or union.

Title II does not subject fiduciaries of IRAs and other non-title I plans to the fiduciary duties of loyalty and prudence.  But it does contain the same definition of “fiduciary” found in title I. So, under Title II as under Title I, “any person who ... renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of [a covered] plan,” is a fiduciary. And Title II contains a prohibited transaction rule that, in relevant respects, parallels that found in title I.


Title II provides, like title I, certain statutory exceptions to its prohibited transaction rule and authorizes the Secretary of Labor to grant exemptions—with or without conditions—if “the exemption is ... (a) administratively feasible, (b) ... in the interest of the plan and its participants and beneficiaries, and ... (c) protective of the rights of participants and beneficiaries of the plan,”

Failure to comply with title II’s prohibited transaction rule subjects parties to an excise tax imposed “on each prohibited transaction.” Any disqualified person who participated in the prohibited transaction - other than a fiduciary acting only as such—is subject to the tax.

Initial violations are taxable at a rate “equal to 15 percent of the amount involved with respect to the prohibited transaction for each year.” If “the transaction is not corrected within the taxable period,” the tax increases to a rate of “100 percent of the amount involved.”

Note: Title II does not create a private cause of action. So it does not preempt state law causes of action relating to IRAs and other plans not subject to title I.

The 1975 5 Part Test Definition of “Fiduciary”

In 1975 the DOL issued regulations defining when a person “renders investment advice” so as to fall within ERISA’s definition of “fiduciary.” That regulation set out a five-part test. Under that test, a person was deemed to “render investment advice” only if he:

(1) “renders advice to the plan as to the value of securities or other property, or makes recommendations as to the advisability of investing in, purchasing, or selling securities or other property,” and he does so

(2) “on a regular basis”

(3) “pursuant to a mutual agreement, arrangement, or understanding, written or otherwise, between such person and the plan or a fiduciary with respect to the plan,” and

(4)  the advice given “will serve as a primary basis for investment decisions with respect to plan assets,” and

(5) the advice will be “individualized ... based on the particular needs of the plan.”

Under this “regular basis” rule, occasional or intermittent advice was not sufficient to trigger application of the prohibited transaction rule.

PTE 84-24

PTE 84-24 created a limited exemption to the prohibited transaction rules in order to permit “certain parties to receive commissions when plans and IRAs purchased recommended insurance and annuity contracts and investment company securities,” such as “mutual fund shares.” The exemption applied to, among other things, the receipt, directly or indirectly, by an insurance agent or broker or a pension consultant of a sales commission from an insurance company in connection with the purchase, with plan assets, of an insurance or annuity contract.

Note:  The exemption came with a number of conditions, including a requirement that

  • the transaction must be “on terms at least as favorable to the plan as an arm’s-length transaction with an unrelated party, and
  • the combined total of all fees, commissions and other consideration received by the insurance agent or broker, pension consultant, insurance company, or investment company principal underwriter ... not be in excess of  “reasonable compensation.”

PTE 84-24 did not distinguish between variable and fixed annuities.

This PTE made it permissible for insurers to compensate employees and agents on a commission basis for sales of variable and fixed annuity products held in ERISA employee benefit plans and IRAs, as long as either (1) the relevant investment advice was not provided “on a regular basis,” or (2) the terms of the transaction were at least as favorable as those offered in arm’s-length transactions and the relevant fees and commissions were reasonable.

Final Fiduciary Definition, Final BIC Exemption, Final PTE 84-24

All (Apr. 8, 2016)

All three of these new rules were in promulgated to address (1) developments in the retirement investment advice market and (2) the thought that oversight required substantial changes in the governing regulations. Specifically, the DOL abandoned the “on a regular basis” limitation on the definition of a “fiduciary.”

Why?  The DOL was convinced that “individuals, rather than large employers and professional money managers, have become increasingly responsible for managing retirement assets as IRAs and participant-directed plans. And the DOL noted that this shift away from large, institutional investors to “small retail investors,” moreover, was accompanied by an increase in the “variety and complexity of financial products,” and by a surge in retirements of baby boomers. The DOL is acutely aware that advice on rollovers can have a profound effect on a retirement investor’s finances. Yet this type of advice is rarely, if ever, provided on a “regular basis.”

Another major factor was the fear that under the prior rules,

“advisers can steer customers”—and, in particular, small retail investors—“to investments based on their (the advisors’) own self-interest (e.g., products that generate higher fees for the adviser even if there are identical lower-fee products available), give imprudent advice, and engage in transactions that would be otherwise prohibited by ERISA and the Code.” 

The new rules replace the five-part test above with a new definition of investment advice to prevent abuse. Under the new definition,

“a person shall be deemed to be rendering investment advice for a fee or other compensation,” if:

Such person provides to a plan, plan fiduciary, plan participant or beneficiary, IRA, or IRA owner the following types of advice for a fee or other compensation, direct or indirect:

(i) A recommendation as to the advisability of acquiring, holding, disposing of, or exchanging, securities or other investment property, or a recommendation as to how securities or other investment property should be invested after the securities or other investment property are rolled over, transferred, or distributed from the plan or IRA;

(ii) A recommendation as to the management of securities or other investment property, including, among other things, recommendations on investment policies or strategies, portfolio composition, ... or recommendations with respect to rollovers, transfers, or distributions from a plan or IRA, including whether, in what amount, in what form, and to what destination such a rollover, transfer, or distribution should be made; and

With respect to the investment advice described in paragraph (a)(1) of this section, the recommendation is made either directly or indirectly (e.g., through or together with any affiliate) by a person who:

(i) Represents or acknowledges that it is acting as a fiduciary within the meaning of the Act or the Code;

(ii) Renders the advice pursuant to a written or verbal agreement, arrangement, or understanding that the advice is based on the particular investment needs of the advice recipient; or

(iii) Directs the advice to a specific advice recipient or recipients regarding the advisability of a particular investment or management decision with respect to securities or other investment property of the plan or IRA.

The final rule defines a “recommendation” as

“a communication that, based on its content, context, and presentation, would reasonably be viewed as a suggestion that the advice recipient engage in or refrain from taking a particular course of action.” 

Bottom Line:   Under the new definition, a person who recommends or suggests that an individual purchase an annuity to hold in an IRA would in most cases be engaged in “rendering investment advice.” And, if that individual was paid on a commission basis, he/she would likely be engaged in rendering the type of investment advice “for a fee” that would trigger the prohibited transaction rules.

The Final PTE 84-24 applies only to fixed rate annuity contracts.  It does not apply to variable or fixed indexed or similar annuities.  So if the consumer’s benefits vary, in part on in whole, based on the investment experience of a separate account or accounts maintained by the insurer or the investment experience of an index or investment model, the PTE will not apply.

This decision to encompass only fixed rate annuities into the Final PTE was based on the theory that fixed rate annuity contracts “provide payments that are ... predictable” and have “lifetime income guarantees and terms that are more understandable to consumers.”

Other kinds of annuities, including fixed indexed annuities, are substantially more complicated, and “are susceptible to abuse.”  Investors in fixed indexed and variable annuities, the Department found, “would equally benefit ... from the protections of [the BIC Exemption], including the conditions that clearly establish the enforceable standards of fiduciary conduct and fair dealing.”

Best Interest Contract Exemption (BIC)

The final rule now requires that - to qualify for the exemption -  the financial institution must:

  • Acknowledge fiduciary status with respect to investment advice to the Retirement Investor
  • Adhere to Impartial Conduct Standards requiring [financial institutions and their advisors to:
  • Give advice that is in the Retirement Investor’s Best Interest (i.e., prudent advice that is based on the investment objectives, risk tolerance, financial circumstances, and needs of the Retirement Investor, without regard to financial or other interests of the Adviser, Financial Institution, or their Affiliates, Related Entities or other parties);
  • Charge no more than reasonable compensation; and
  • Make no misleading statements about investment transactions, compensation, and conflicts of interest;
  • Implement policies and procedures reasonably and prudently designed to prevent violations [by its advisers] of the Impartial Conduct Standards;
  • Refrain from giving or using incentives for Advisers to act contrary to the customer’s best interest; and
  • Fairly disclose the fees, compensation, and Material Conflicts of Interest, associated with their recommendations.

For investment advice to IRAs and other non-title I plans, the exemption further requires that the financial institution enter into “an enforceable written contract” with the customer that includes the first four requirements listed above.

Note: The financial institution is forbidden from including in that contract “exculpatory provisions disclaiming or limiting liability,” provisions waiving or qualifying the right to bring or to participate in class action or other representative lawsuits, or liquidated damages provisions. However, it may include a knowing waiver of punitive damages, waiver of the right to rescission of recommended transactions, and reasonable agreements to arbitrate individual claims. Those waivers are allowed “to the extent ... permissible under applicable state or federal law.”

Bottom Line:  These final rules together permit otherwise prohibited compensation arrangements—such as commissions to an agent based on the retirement investor’s investment decisions—providedthat the financial institution:

  • acknowledges its fiduciary status under ERISA and/or the Code;
  • adheres to the Impartial Conduct Standards and ensures that its advisers do so as well;
  • adopts policies and procedures to avoid material conflicts of interest and barring the use of sales quotas and incentives that are intended to or likely to cause advisers to make recommendations that are not in the best interest of the retirement investors; and
  • makes certain disclosures.

Financial institutions that engage in otherwise-prohibited transactions with non-title I plans must enter into a written contract with plan owners.

Furthermore, the final rule includes a more in-depth discussion of the “reasonable compensation” requirement than was contained in the proposed rule.


Both ERISA and the Code define a “fiduciary” to include, among others:

those who “render investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or who have any authority or responsibility to do so.” 

If a party is considered a “fiduciary,” the “prohibited transaction” rules under both ERISA and the Code apply.  These rules prohibit conflicted transactions unless a statutory or regulatory exemption applies.

The implication is this:  If the prohibited transaction rules apply, fiduciary advisers to ERISA employee benefit plans and individual retirement accounts (“IRAs”) may not receive compensation—including commissions—that varies based on the fiduciary’s investment advice. Because insurance companies that sell fixed annuities typically compensate their employees and agents through the payment of commissions, they would be unable to operate (at least as currently structured) if treated as fiduciaries and not granted an exemption from the prohibited transaction rules.

Prior to the promulgation of the new rules, most NAFA members were able to avoid this difficulty because the governing regulations defined a “fiduciary,” in relevant part, as someone who renders investment advice “on a regular basis.” Since fixed annuities are typically acquired in a single transaction, they avoided the reach of this prior definition of fiduciary.  Even in those cases in which advice regarding the sale of a fixed annuity might have otherwise fallen within the prohibited transaction rules, the relevant transactions were exempted under Prohibited Transaction Exemption 84-24 (“PTE 84-24”) (with certain conditions).

However, the three rules NAFA challenged changed the playing field in significant respects:

First, the new rule which defines the term “Fiduciary” modifies the definition of “fiduciary” by dropping the requirement that the relevant investment advice must be provided on a “regular basis.”

Second, the Amendment to PTE 84-24 removes variable and fixed indexed annuities (but not fixed rate annuities) from the exemption of PTE 84-24.

However, recognizing the sweeping consequences of the first two rules, the third new rule—the Best Interest Contract (“BIC”) Exemption creates a new exemption for variable and fixed indexed annuities (among other products) that permits financial institutions and advisers to receive compensation—including commissions—based on their provision of investment advice.

Here’s the catch:  To qualify for the BIC Exemption, financial institutions and advisers must abide by certain conditions:

(1) Advisers to employee benefit plans and IRAs must abide by the Department’s newly adopted “Impartial Conduct Standards,” and financial institutions must adopt policies and procedures designed to ensure that their individual advisers adhere to” these standards.

The Impartial Conduct Standards, in turn, require that financial institutions and advisers “provide investment advice that is, at the time of the recommendation, in the best interest of the retirement investor.” This subjects qualifying financial institutions and advisers to the same duties of loyalty and prudence applicable under Title I of ERISA!  This applies even with respect to advice regarding IRAs and other plans that are not subject to title I (and thus not otherwise subject to the duties of prudence and loyalty).

Financial institutions and advisers must ensure that they will not “receive, directly or indirectly, compensation for their services that is in excess of reasonable compensation.

These new Impartial Conduct Standards also require that financial institutions and advisers ensure that “statements by the financial institutions and their advisers ... about the recommended transaction, fees, and compensation, material conflicts of interest, and any other matters relevant to a retirement investor’s investment decisions, will not be materially misleading at the time they are made.” 

(2) Financial institutions seeking to rely on the BIC Exemption must also affirmatively represent in writing that they and their advisers are fiduciaries under ERISA and the Code and must warrant, among other things, that they have written policies in place “designed to ensure that their advisers adhere to the Impartial Conduct Standards.

(3) With respect to IRAs and other plans that are not subject to title I of ERISA, financial institutions seeking to rely on the BIC Exemption must go a step further and “agree that they and their advisers will adhere to the exemption’s standards in a written contract that is enforceable by the retirement investors.”

The contract may not include a provision “disclaiming or otherwise limiting liability,” waiving the “right to bring or participate in a class action,” or agreeing “to arbitrate or mediate individual claims in venues that are distant or that otherwise unreasonably limit the ability of the retirement investors to assert the claims safeguarded by” the BIC Exemption.

Take Aways

Here are some take-away statements that show the Court’s position in this case:

  • A “recommendation” includes a “communication that ... would reasonably be viewed as a suggestion that the advice recipient engage in or refrain from taking a particular course of action.”
  •  “Someone who provides “a recommendation as to the advisability of acquiring, holding, disposing of, or exchanging, securities or other investment property,” is providing “investment advice.”
  •  “Nothing in the phrase “renders investment advice” suggests that the statute applies only to advice provided “on a regular basis.”
  • “Fixed indexed annuities are “complex products” demanding “sound advice that is untainted by the conflicts of interest posed by advisers’ incentives to secure” sales.  Those engaged in the annuities business do not simply dispense products but, rather, provide individualized investment advice.”
  •  “In the retail IRA marketplace, growing consumer demand for personalized advice ... has pushed brokers to offer comprehensive guidance services rather than just transactional support.”
  • “ERISA was enacted with “broadly protective purposes,” and it “commodiously imposed fiduciary standards on persons whose actions affect the amount of benefits retirement plan participants will receive.”
  • “Limiting fiduciary status to those who render investment advice to a plan or IRA “on a regular basis” risks leaving retirement investors inadequately protected—particularly when one-time transactions like rollovers will involve trillions of dollars over the next five years and can be among the most significant financial decisions investors will ever make.”
  •  “The relationship between advisers and investors has changed. The increased complexity and variety of financial products in the marketplace has sown “confusion,” “increased the potential for very costly mistakes,” left retail investors more dependent on expert advice, and exposed plan participants and IRA owners to unknown conflicts of interest.”
  •  “Retail investors now confront myriad choices of how and where to invest, many of which did not exist or were uncommon in 1975. …These choices vary widely with respect to return potential, risk characteristics, liquidity, degree of diversification, contractual guarantees and/or restrictions, degree of transparency, regulatory oversight, and available consumer protections.”
  •  “In today’s marketplace,” commissions “give ... advisers a strong reason, conscious or unconscious, to favor investments that provide them greater compensation rather than those that may be most appropriate for the plan participants.”

Certainly, the battle is not over. On Nov. 14, 2016, NAFA appealed the District Court’s ruling. In their appeal, NAFA requested a preliminary injunction to prevent the new rules from taking effect “until at least ten months (or as much as two years) following the final disposition of th[e] litigation.” NAFA also filed a motion seeking either an “expedited status conference” or “expedited relief” on its motion for a preliminary injunction. District Court Judge Randolph Moss granted the NAFA’s request for an expedited ruling but left the date of compliance in place. On Tuesday, November 29th, NAFA asked an appellate court for an emergency injunction to suspend the Department of Labor’s fiduciary rule.


There are many consumer advocates who feel strongly that sales of many insurance products - whether or not the instruments are deemed securities - should be required to operate under the fiduciary standard of care rather than the much weaker “suitability” standard of care.  On the other side are strong efforts to delay the scheduled April 2017 implementation.  Furthermore, it is quite possible that a Trump-appointed Secretary of Labor will withdraw the DOL rules entirely in view of the campaign promises to reduce government regulations. This would render the Department of Labor and consumer advocates’ efforts useless and enable – if not encourage - a continuation of the problems and abuses that led to its promulgation.


If these new rules somehow survive the gauntlet they are certain to face, they will signal a profound change in the way advisors and product providers operate but will result in long-term benefits to them as well as consumers with respect to the trust that is the glue the holds complex financial transactions together.





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