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DOL Rule Resources

The financial services industry has become increasingly regulated in the past few years. New regulations have increased the scrutiny of adviser fiduciary decision making. 

In April of 2016 the Department of Labor Rule bringing IRA accounts under the supervision of the DOL was enacted with a rolling timeline that goes into full effect in January of 2018.  While most of the discussions surrounding this new regulatory regime have focused on how advisers are or can be compensated in tax qualified personal accounts, much less time has been spent on the other aspect of DOL oversight with respect to these accounts.  The aspect referred to as prudence however is every bit as important to the DOL. 

The DOL’s historical focus on prudence has typically led to examining whether a prudent process has been in place by those subject to their scrutiny; a process that any prudent man familiar with such matters would also use.  The emphasis on having a process and being able to document that a process was in place we believe is intended to minimize the odds that an unintended catastrophic investment outcome could harm the long term financial well-being of investors.  The DOL tests whether a prudent process was in place by requiring a record of documenting that process.

So how does an adviser who oversees IRA accounts get ready for this new round of scrutiny? Firstly, make sure you have a prudent investment process in place from research for asset allocation, product selection and ongoing monitoring, portfolio construction to portfolio rebalancing. Secondly, make sure that you memorialize your approach and investment guidelines and apply them consistently across your business.  Thirdly, be able to document One and Two and save your work for future regulatory exams.

For advisers who prefer, some of this work can be outsourced to CMC through our eCIO service.  eCIO is a specialized a la carte research service drawn from our comprehensive outsourced chief investment officer solutions. eCIO allows advisers to pick and choose the CMC research needed to complement their own work for the complete documentation of their total investment process. Because eCIO is a la carte, advisers can customize a business solution suitable for their business and budget. 

 

eCIO services may include:

  • Long term forward looking capital market assumptions. 
  • Asset allocation guideline development
  • Asset allocation guidance
  • Model portfolio holdings based performance attribution
  • Model portfolio performance analysis
  • Portfolio construction guidance
  • Product roster management
  • Watch List monitoring
  • Product and model portfolio performance scorecards (customizable)
  • Economic and market chart library (private label-able)
  • Monthly economic commentary and capital market update (private label-able)
  • Ad hoc news alerts (private label-able)
  • Product/model portfolio factsheets (private label-able)
  • Product due diligence (available in Tiers depending on budget)

eCIO Services--audio video replay(8 minutes)

DOL Resource Rule 


Which eCIO service is the right fit for your business?

Call or contact a CMC advisor consultant to discuss your needs and more.

 

Barry Mendelson, CIMA

414-727-7995

barry@cmarkc.com

 

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