fi360 Launches Fiduciary Focus Toolkit

New software from fi360 provides broker/dealers and advisers with advanced fiduciary oversight capabilities. 

The new Fiduciary Focus Toolkit from fi360 enables financial professionals to automate adviser workflow and improve oversight of fiduciary best practices.

With the emergence of the new Department of Labor (DOL) fiduciary rule, advisers and broker/dealers face novel challenges when creating investment policy statements and archiving the documentation required to meet the strict fiduciary standard.

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To overcome these challenges, fi360 says its new Fiduciary Focus Toolkit “allows the home office to guide advisers as they adopt and create investment policy statements, investment watch-list criteria, client monitoring reports and other essential fiduciary-related activities.” According to the firm, the toolkit “accelerates compliance with the DOL rule by ensuring the monitoring and documentation of client accounts aligns with fiduciary best practices. Because these practices are built into the software, advisers can scale their businesses upon a fiduciary framework they can fully control and monitor.”

Because the software allows broker/dealers to centralize their oversight of investment policy statements and watch-list management, home offices can be more confident that advisers are using prudent processes and reducing their organization’s liability related to fiduciary obligations.

“Finalization of the DOL rule has shined a brighter light on fiduciary-related tools and support, making it the perfect time to launch the Fiduciary Focus Toolkit,” says John Faustino, chief product and strategy officer at fi360.

More information about the Fiduciary Focus Toolkit is available online here. The firm also recently announced formal fiduciary training that helps bring advisers and broker/dealer professionals up to speed about the landmark DOL rule change. 

Whitepaper Discusses Fee Reasonableness of Advisers

“On April 10 the focus will expand to cover IRAs and the burden will be on the advisers to prove the reasonableness of their fees,” notes Fred Reish of Drinker Biddle.

Fiduciary Benchmarks has published its newest whitepaper, prepared by Drinker Biddle, about adviser fee reasonableness.

In the whitepaper, Fred Reish and Bruce Ashton of Drinker Biddle, discuss fee reasonableness and the financial adviser’s obligation to the individual retirement account (IRA) and 401(k) plans they serve.

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With the new Department of Labor (DOL) conflict-of-interest regulation, there will be heightened scrutiny on plan fees. While plan sponsors are not relieved of their obligation to review fees and compensation, financial institutions and advisers now have a new obligation under their best interest contract exemption (BICE) and other exemptions to determine their fee reasonableness.

“It’s a whole new world. Virtually every financial institution works with IRAs. If you ask any of them if they know how to benchmark an IRA, the answer would be no. They will need sound legal guidance and proven technology providers to help solve these problems” says Tom Kmak, co-founder and CEO of Fiduciary Benchmarks.

As Fred Reish of Drinker Biddle points out, “while the concept of ‘reasonable compensation’ is familiar to retirement plan advisers, it is new to most advisers who focus on wealth management and IRAs. But, on April 10 the focus will expand to cover IRAs and the burden will be on the advisers to prove the reasonableness of their fees. As a word to the wise, advisers should have industry-based documentation in their files.”

How to ensure this is happening is tricky though. And most importantly, determining how those fees relate to the quality, service and value being provided by the financial adviser to the plan or IRA holder can be even harder to evaluate.

The whitepaper will help clarify the changing roles and expectation such as:

  • Who has the job of determining whether an adviser’s compensation is reasonable―the plan sponsor, the IRA owner or the adviser?
  • What has changed in regards to the obligation of a fiduciary adviser to a plan or IRA?
  • Has the obligation to determine the reasonableness of compensation shifted from the plan sponsor to the adviser or has it become a dual obligation?
To download the whitepaper, go to http://www2.fiduciarybenchmarks.com/Fee_Reasonableness.

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