Every day in 2016, I saw an article in our trade press speculating on what the Department Of Labor’s final rule would look like. Finally, the wait is over and the rule is in place. Speculation about the rule, however, has not ceased. It has merely redirected its focus.
The most popular topic seems to be what challenges to the rule may be launched. There are plenty of suggestions that various industry groups may sue, on what grounds they will try to stop or alter the rule and the odds of these efforts succeeding.
Then, of course, there is the pontificating of how the rule will fare once our new president takes office. Unsurprisingly, some in Congress have already proposed legislation that would put a halt to the DOL’s implementation though most observers believe the measures have no chance of passing under the current administration.
A whole other genre of speculation regarding the rule surrounds the question, “What will advisors have to do now?” Recently, I was subjected to a slew of theories about this as I spoke at a couple of conferences within a few weeks of the announcement of the new rule by the DOL.
I heard a talk about innovations in long-term-care insurance. It was actually quite encouraging. The last several years, fewer and fewer options have been available, and it is nice to see new products coming to market. Insurance isn’t the answer for everyone, of course, but the more options we have as advisors, the more likely we can fill a client need.
Then the speaker said, “Look people. With the DOL rule, if you aren’t recommending LTC policies, you are asking for trouble.”
I thought that a bit odd. The DOL rule applies to the advice, or lack thereof, applied to retirement accounts and IRAs. LTC issues are handled under completely different standards, regulations and jurisdictions.
I expect product-sponsored speakers to extol the virtues of their product, so I didn’t take much from the comment other than he had shifted from educator to promoter. He lost some credibility with me for that shift, but I was happy for the good information he had shared and only rolled my eyes a little bit.
A day later, I sat in on a program about retirement income delivered by an academic who is a fan of immediate annuities. That is fairly common in the academic community. The presentation was sound and all was well.
Then the speaker said, “I can’t emphasize enough that the DOL will be looking at this under its new rule. If you aren’t recommending immediate annuities, you are going to have issues.”