Recently, the Department of Labor released the first in a series of FAQs addressing the implementation of the Best Interest Contract Exemption rule (or BICE), regulation impacting financial advisory service providers and the type of services they are able to provide to their clients. BICE is intended to protect investors from predatory advisors; specifically from the risk of receiving financial advice that benefits the advisor more than the client. These FAQs were presented in a blog post from the DOL, which you can find on their website here.
Many of the people who read this post will be members of the financial services professional community–my friends, colleagues, peers, and partners– and I think it’s safe to say that most of us agree that predatory advisors are bad for the industry overall: they make the financial industry look untrustworthy, and discourage people from doing business with companies that are positively impacting the financial landscape. But I think it is equally safe to say that those of us who spend our lives working in this industry every day have a deep appreciation for some of the complexities involved in the implementation of BICE; complexities that your average person might not fully grasp.
When ADISA announced that the DOL had released this first set of FAQs, I was grateful to them for emailing an alert to our community of alternative investment professionals to the news, seeing as it has the potential to impact the way so many ADISA members structure their businesses and conduct transactions with clients. I am further grateful that they have gone to the effort to provide links to some of our industry’s most reputable publications’ coverage of the FAQ on their website.
Like many of you, I’m a pretty busy guy and it was very helpful to have ADISA’s time-saving help while I did my “due diligence” in researching the industry’s response to the initial FAQ and assessed its likely impact on Investor Services’ and IRA Services products and partnerships.
You do not need me to go into the specifics of what the FAQ covers, I’m sure many of you have already read the parts of it that are relevant to your businesses already. But I am glad to see that it was compiled based on feedback and input the DOL received from, among other sources, our community of financial services professionals. I am pleased that the content in the FAQ provides critical guidance on early-stage implementation logistics, among other things. It is important that our community is as knowledgeable as possible about these regulations so that we can comply with them without any unnecessary expenditure of resources or time.
Reflecting on this overall positive outcome from the FAQs lead me to further reflect on ADISA’s role in circulating this information to its members: again I am reminded of how important its services are to our community. Members of ADISA can be confident that they will always know the breaking news that impacts their businesses, be given the tools and direction to get and stay informed on the issues that affect us, and also be given a voice through all of ADISA’s advocacy efforts on our behalf. For those of you reading this that are not already members, I encourage you to consider joining: the organization is one of the most valuable networks and I have, as well as one of my most trusted sources of information.
For those of you who are members, I am sure you’ll agree with me that you and your business have had many opportunities to benefit from ADISA’s services. I have witnessed its potential in so many ways, which is why I am excited about the opportunity to serve on the board of directors. As a passionate member of this community and a strong believer in the value of ADISA’s programs and agenda, I hope my fellow members will consider voting for us when the board of directors election opens on November 7th.