Elevating Success in the New DOL Rule Sales Environment

DOL Releases Final Fiduciary Rule 2024 Blog

The Department of Labor (DOL) has announced its final Retirement Security Rule that will require advisors to always act in the best interest of their clients when giving advice on retirement investments. Some members of Congress and financial industry groups are worried about these proposed rule changes as it will greatly expand the scope of the Best Interest rule into the sale of annuities. At a recent hearing, Congressman Bob Good criticized the DOL’s proposal. He thinks the new rule could cause problems for financial companies that provide retirement products and services.

“My main concern is that the fiduciary proposal will have a disastrous impact on the industry,” said Rep. Bob Good (R-Va.) who chairs the subcommittee that held the hearing. “Past versions of the DOL fiduciary rule created massive headaches for the retirement products and services industry.” 

What’s the big deal with the new DOL rule?

Firms have a few main concerns. First, following the rule may cost more money. Firms must disclose conflicts of interest. They must explain why they recommend products and have an audit trail demonstrating this process. They may need new processes and technology. All these changes can be expensive. Higher costs make some business models less profitable.

Second, the rule highlights the priority of taking steps to maintain a record of providing best interest recommendations to the clients. Advisors will need to select the best option, regardless of compensation and incentives. This could mean fewer sales of profitable products.

Third, firms fear lawsuits. Firms may need additional insurance for potential legal costs as interpretation of this new rule goes into effect. To avoid possible risks in maintaining compliance, they may give very conservative recommendations or not recommend certain products at all.

The DOL’s final rule may make things harder for advisors in terms of potential penalties, more paperwork and higher costs, which can be avoided with the right digital guard rails.

Luckily, there is a solution available today that can help firms meet these new compliance requirements while maintaining your sales. Hexure’s sales automation platform FireLight allows for both carriers and distributors to develop customizable rules-based functionality that will provide an immediate solution to this changing regulatory environment.

Did you know FireLight…

    1. Offers needs assessment tools to help advisors assess the actual need of their client, including suitability questionnaires to collect data upfront. Make sure key information is collected every time.
    2. Includes review of the client’s data, with suitability scoring to narrow down suitable products based on the score. Advisors use data collected in needs determination or suitability questionnaire. The rules can be used to filter products based on the data/need. Advisors can be confident when suggesting investments and insurance that suit the client’s best interests.
    3. Alerts the advisor about changes to client’s requirements. The advisor can then make sure their advice still fits the client’s needs.
    4. Explains clearly costs and duties, with disclosures and signatures. Firm can incorporate disclosure forms/DOL required document, providing clients the information to make informed decisions. Clients can easily review and approve them.
    5. Provides an audit trail, linking pre-sale data and activities with the application for a full audit trail and history from capture to submission. The advisor gets a digital audit trail of their sales and multiple queue capabilities for compliance oversight.

With Hexure’s FireLight solution, every client gets advice through the same consistent, streamlined, unbiased and recordable process. FireLight configurability supports unique workflows to meet individual sales processes and DOL compliance strategies. It’s all tracked and audited to prove compliance with the DOL final rule.

Lasting Reflections

The DOL Retirement Security Rule may create more work and expenses for financial advisors. Advisors may feel constricted by the possible increased costs of compliance. Many are concerned that they are losing the ability to provide quick and reliable service to their clients. In the end, this final rule should not have a negative impact on sales. Hexure can help you support your advisors to deliver compliant, reliable and auditable product selection tailored to each client’s unique needs with technology that exists today.


Check out the following resources for additional information on the new DOL Retirement Security Rule and Amendments:

News Release: Biden-Harris Administration Announces Rule To Protect Retirement Savers’ Interests By Updating Investment Advice Fiduciary Definition

Fact Sheet: Retirement Security Rule and Amendments to Class Prohibited Transaction Exemptions for Investment Advice Fiduciaries  

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