Technology Driven Offerings Help Investment Industry Prepare, Implement and Sustain DOL Compliance
LAKE SUCCESS, N.Y., Nov. 3, 2016 – Broadridge Financial Solutions, Inc. (NYSE:BR) today announced a new suite of technology driven solutions to help the investment community solve several of the most pressing challenges associated with the upcoming U.S. Department of Labor (DOL) Conflict of Interest Rule. The new offerings – DOL Fiduciary Solutions, DOL Customer Communications, and DOL Compliance Reporting – can help firms validate, communicate and comply with the new rules, which take effect April 10, 2017.
The new DOL rule is one of the biggest regulatory events facing the financial industry. It will expand the definition of ERISA fiduciary investment advice and apply a “best interests” standard to a broader range of investment services, including retirement investment advice and certain IRA rollover recommendations.
“The financial industry needs to evolve their businesses and strategies to meet the higher standards, and turn compliance into a competitive advantage. Forward thinking firms are using the new rule as an opportunity to further engage customers and deepen relationships through new technologies,” said Andrew Besheer, Product Lead for Broadridge’s DOL Fiduciary Standard solutions. “Helping fiduciaries meet disclosure obligations can provide an additional communications touchpoint to add transparency and clarity to point-of-sale transactions, and strengthen customer relationships, while improving firm-wide operations.”
According to a Broadridge poll of nearly 500 financial professionals, sixty percent of asset managers, broker-dealers, insurance providers and record-keepers say that the new DOL Conflict of Interest rule will have a significant impact on their business models. In over 150 Broadridge dialogues with financial institutions, the need for automated, repeatable, and thoroughly documented practices governed by each firms’ specific business rules is a consistent theme.
Solving for Suitability
Under the new regulations, advisors will need to standardize and simplify the process for capturing recommendations for funds and annuities and investor signature. Broadridge’s DOL Fiduciary Solutions, built on Broadridge’s industry leading FundPOINT data, can help financial advisors and firms make investment recommendations that meet fiduciary standards. Using the tool to evaluate and validate their mutual fund sell list, advisors can see that the funds and share classes on broker-dealer and other distributor platforms are suitable for specific clients. Firms can equip advisors with self-service tools to distribute contract, notification and disclosure documents, while aggregating required data and incorporating point-of-sale suitability analysis, fee data and performance information with transparency and clarity to end customers.
Compliance with Customer Communications
The new DOL rule will require firms to produce, distribute and archive all disclosures, transaction documents, regulatory documents, and advisor recommendations. This will include the Best Interest Contract (BIC), Fiduciary Acknowledgement Letter, pre-transaction disclosures, and numerous other disclosures. Regardless of delivery method –electronic, print, mobile– all communications must have updated data sourced from multiple databases and quality checked for accuracy. Broadridge’s DOL Customer Communications solution leverages Broadridge’s existing communications connectivity across the breadth of the financial services industry to easily allow for composition, multi-channel print or digital delivery, as well as tracking and archival capabilities for compliance. A replay of Broadridge’s recent webinar focused on DOL customer communications is available here.
Compensation and Conflicts of Interest
To comply, organizations need to identify and address conflicts of interest with third-party compensation both at the firm and advisor level by eliminating, restructuring, or “levelizing” compensation / fees. It’s going to be critical to continuously monitor client accounts and advisor activity for compliance purposes. By creating, communicating and enforcing procedures that minimize conflicts of interest, firms can proactively manage risk. Broadridge’s DOL Compliance Reporting solution, built on Broadridge’s scalable RevPort revenue management engine, can help firms maintain compliance and manage risk by minimizing conflicts of interest with third-party compensation/payments; and aggregating account level data for monitoring and reporting.
The time remaining to comply with the DOL Fiduciary Rule is running short. For additional details and resources on Broadridge and the DOL Fiduciary Standard, please visit www.Broadridge.com/DOLFiduciaryRule.
Broadridge Financial Solutions, Inc. (NYSE:BR) is a leading provider of investor communications and technology-driven solutions for broker-dealers, banks, mutual funds and corporate issuers globally. Broadridge’s investor communications, securities processing and managed services solutions help clients reduce their capital investments in operations infrastructure, allowing them to increase their focus on core business activities. With over 50 years of experience, Broadridge’s infrastructure underpins proxy voting services for over 90% of public companies and mutual funds in North America, and processes more than $5 trillion in fixed income and equity trades per day. Broadridge employs approximately 10,000 full-time associates in 16 countries. For more information about Broadridge, please visit www.broadridge.com.
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Broadridge Financial Solutions
Brainerd Communicators, Inc.