White Paper: Mastering Fiduciary Readiness with These 4 Key Priorities
June 9 ushered in a new era of financial regulation. With the legislation hanging in the balance through heavy criticism and comprehensive review, its implementation last month sent ripples of panic through the financial world. Now that the Fiduciary Rule is suddenly in effect, many firms and advisors are rushing to bring their priorities and practices into compliance as quickly as possible. We’ve addressed four issues that are high-priority for firms and advisors working to rapidly align with the fiduciary rule in our most recent white paper: 4 Fiduciary Matters that Need Attention Now. Here’s a sneak peek of what you can expect when you download our free white paper:
- Fee Monitoring
Under the new DOL regulation, firms and advisors must adhere to meticulous disclosure practices to be transparent about their costs, fees, and commissions. In exact dollar figures, advisors need to reveal to investors how they are getting paid. They must also be able to prove to auditors that they have made these detailed disclosures.
These oversight activities place a heavy administrative burden on advisors, particularly as some clients shift their investments into different types of accounts. They may also have to adjust their fee structures to align with the updated definition of reasonable compensation. With all these changes under way, advisors need to be thorough in identifying and addressing accounts that are non-compliant.
- BICE Execution
BICE agreements are handy tools for working around some especially tricky commission restrictions the new regulation imposes. They too, however, are a lot of work to execute. Securing a BICE agreement requires advisors to navigate a tedious five-step process that involves building a comprehensive client profile, drafting and sharing the agreement, ensuring the investor fully understands the contract, getting it signed, and securely storing the signatures. These procedures must also be documented to demonstrate compliance in the event an audit should take place.
- BICE Storage and Sharing
Obtaining the agreement is just the start of satisfying the new regulatory requirements for BICE. Equally important is the storing and sharing of BICE contracts in a failsafe and compliant way. The complexity and multiple parts of BICE agreements make storing and sharing them especially challenging.
Firms that lack technology resources have an extraordinarily difficult time keeping BICE agreements secure and sharing them with all those who require them. Maintaining and making available BICE records, documentation, and wet signatures by hand is impractical and insecure. Even firms with technology systems in place still struggle to compliantly store and share BICE components if their systems are not fully integrated. Without seamless integration, they lack the transparency that is required by law.
- BICE Communication Documentation
Of all the specific requirements for BICE, one of the most complicated to get right is the documentation of all BICE-related communications. To fulfill fiduciary requirements, all BICE interactions happening between advisors, firms, and investors must be accessible to regulators needing certification that matters of compensation and conflicts of interests have been thoroughly vetted. Transparency and security are critical to this requirement too, drastically intensifying the challenge for organizations relying on manual processes or disparate systems.
Easing into Fiduciary Compliance
While some less-prepared firms feel a heightened sense of urgency to quickly bring their practices into compliance with the new DOL regulation, there is still time to align by shifting priorities and deploying the right tools. By targeting key issues and maximizing technology designed to simplify their processes, firms and advisors can get in front of fiduciary compliance with ease. Download the entire white paper to explore what fiduciary matters need your attention today. [link to WP LP]
To assist with DOL compliance, First Rate offers ARKON CRM, a technology platform that seamlessly integrates CRM, document management, investment performance, client reporting, and e-signature capabilities. Visit our solution page to discover how ARKON merges all the tools you need to take the fiduciary compliance bull by the horns.