Sister Broker/Dealers Launch DOL Compliance Program

In light of the DOL fiduciary rule, the two firms plan to roll out a series of new compliance tools and initiatives including a Product Mix Transition Calculator and a digital-advisory platform.

CUSO Financial Services (CFS) and Sorrento Pacific Financial (SPF) have released a series of practical tools, resources, and training programs designed to help financial-institution advisers and investment programs comply with the Department of Labor (DOL)’s Conflict of Interest Rule, which goes into effect April 2017.

The firms say several of their programs and materials including their transaction cover sheets and documentation have been in pace for some time and require slight modifications to their content in order to be complaint.

Among the new offerings is the Product Mix Transition Calculator, designed to help programs and financial advisers analyze their books of business and product mix to understand the financial impact of expected post-DOL commission rates and changes in product mix. The calculator shows an individual adviser assets under management by product type along with revenue details. It allows the adviser to make comparisons based on various adjustments to product mix and commission rates. CFS/SPF says this helps programs and financial advisers create a measurable plan for the changes they will need to make to achieve their goals under the new DOL Fiduciary Rule.

“Our programs ask us why we are so calm amid the chaos of the rule changes, but we know that we are well-prepared – we have been working in the best interests of our clients as recommended by FINRA and the SEC for a long time,” says Valorie Seyfert, CEO for the two broker/dealers. “Other broker/dealers may be concerned about the changes they have to make because they are dealing with regulatory actions, shareholder issues, proprietary products, and other challenges on top of the added DOL changes, which all combine to make it that much more difficult for them to make any adjustments and serve the needs of financial institutions. We have no such issues and have had many of the requirements in place for some time, so incorporating the DOL Fiduciary Rule will be a seamless transition for us.”

Other tools scheduled to launch soon include The DOL Corner. This proprietary Web portal for CFS/SPF registered financial advisers, program managers, and financial-institution executives updates them on the rule’s components and answers frequently asked questions. It also provides timeline and monthly forum updates as well as training materials.  

The firms will also offer DOL update conference calls which will allow managers to discuss any concerns they have and receive details and explanations on changes.

Production studies will serve as business reviews that can help identify marketing opportunities to attract and replicate best clients.

The assets under management (AUM)/Revenue studies are designed to “help to identify adviser capacity issues and develop strategies for increasing frequency of reviews and penetration as well as provide strategies to move appropriate clients to fee-based advisory programs,” the firms say.  

NEXT: Digital Adviser

CFS/SPF also plans to roll out a new digital advisery or robo-adviser offering, and a new guided portfolios platform. Along with these offerings will be the introduction of a new mutual fund account platform that will be free of transaction charges, inactive account fees and account transfer and termination charges. In addition, it will include automated prospectus delivery at time of sale at no cost.

Full reviews of all compensation grids to ensure they are void of material conflicts with no incentives to sell one product over another and vetting of products to ensure they meet fair and reasonable compensation standards

“DOL will result in money and clients in motion, looking at alternatives to meet their financial planning needs and their investment objectives,” says Seyfert. “Don’t miss this window of opportunity to capture new clients and attract new assets into your program. Having a focused strategy now will materially change where you are in the future, so don’t delay in putting growth strategies into action.”

CFS/SPF is the latest in a string of firms which have launched online tools, programs or training meant to help professionals throughout the financial-services industry adapt to the DOL’s fiducuiary rule which will be fully implemented by January 2018. Other firms include SEI/Redtail, AssetMark, fi360, PCS, and Broadridge Financial Solutions.