Interesting News from the DOL

October 31, 2016 by Sheryl J. Moore

Dozens of Field Marketing Organizations (FMOs) and Brokerage General Agencies (BGAs) have been contacting me since the Department of Labor’s (DOL’s) final fiduciary rule was issued; wanting to know how they too can apply to become a ‘Financial Institution.’ In response, I reached back out to my folks at the DOL, asking for their guidance. In the interim, the 18 marketing organizations that have “applied with the DOL to be a Financial Institution (FI)” have received much press…many of these firms are even recruiting to this.

Today, I finally caught up with a lawyer I’ve been working with at the DOL. Interestingly, he indicates that there is no need for any marketing group or agency to submit an application for FI status. Although the DOL has received 18 applications thus far, it is unnecessary to apply. Ultimately, the DOL will issue an exemption, and if an FMO or BGA complies with the exemption, they will have relief. All one needs to do is notify the agency that they intend to comply with the class exemption.

Note that there is no guarantee of exemptive relief until a final exemption is published.

Now, that being said, the DOL welcomes the conversations that they are having with marketing groups and agencies. However, the DOL’s intent is to provide a larger form of exempted relief, and all a firm needs to do is meet the exemptions. Those seeking an exemption can continue to apply, if they wish.

This attorney could not speak to the date, upon which, such relief may be issued. However, he assured me that it is forthcoming.

So, if your marketing group or agency is tired of hearing from your reps that they are concerned you haven’t applied for FI status…just explain that you don’t need to.