There is a great deal of confusion and misinformation going around in relation to the advisor’s responsibilities post June 8th when submitting business involving qualified funds. You do not need a special license or an affiliation with an RIA firm. For business submitted through Financial Brokerage between June 9th and December 31, 2017, the PT 84-24 exemption will apply. What exactly does that mean for you, the advisor?
You must adhere to the Impartial Conduct Standards which are:
No misleading statements or advertising
Recommendations must be in the best interest of the client
(You must document how you came to the conclusion that the product recommended was in the client’s best interest)
Compensation received must be reasonable (DOL has not defined reasonable)
You must complete a Disclosure Statement with your signature as well as the client’s signature
Disclosure Statements cover issues such as:
Relationship with Carrier
Conflicts of Interest (failure to disclose a material conflict of interest is considered a misleading statement)
Product fees, charges, discounts, penalties or adjustments
Disclosure Statements must be retained in your client records for six years. Some carriers may require the statement be attached to the application.
You must complete a Professional Report/Producers Report
(Each carrier will have their own specific form)
Much of the above information is probably not new to you. The rule formalizes and documents your interactions with your client. Financial Brokerage has an experienced staff to assist you in determining which products are right for your client. Please take advantage of their extensive knowledge. If you have questions regarding the rule or any of the above information, please do not hesitate to call.
Although we anticipate additional changes to the rule over the next seven months, the above information is what you need to be concerned with in the near future. We will continually update you with any new information as it becomes available.
If and when the final version of this law is enacted, Financial Brokerage will be ready and prepared with the necessary platforms and state of the art technology to assist you in growing your business and meeting the needs and objectives of your clients.