Analyst: Some Firms Want to Keep Trips, Incentives
October 18, 2016 by John Hilton
Most industry professionals consider the Best Interest Contract Exemption (BICE) the most detested part of the Department of Labor fiduciary rule.
Yet some of them may end up using it to continuing selling fixed annuities without interruption, according to one analyst. Selling under the BICE will enable financial institutions to continue offering trips and other incentives, said Fred Reish, a partner at Drinker Biddle & Reath in Los Angeles.
The cost is a much tougher compliance regime that includes hefty disclosures, recordkeeping and a signed contract between advisor and client.
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Firms may see the BICE as a way to maintain attractive compensation for advisors. According to Wink’s Sales & Market Report, the average street level compensation for indexed annuities as of the second quarter 2016 was 4.6 percent, the lowest in more than a decade.
