1. 1
Department of Labor (DOL) Fiduciary Rule – The DOL’s
perspective
Impact on Investors (the DOL’s perspective)
Americans should be able to retire with dignity after a lifetime of hard work and
saving.
• Approx. 40 million American families have more than $7 trillion in IRA assets
• Conflicts of interest lead to, on average, 1% percentage point lower annual return
on retirement savings and result in approx. $17 billion of losses every year.
• In focusing on just one subset of transactions, the DOL estimates that the new
fiduciary rule would save investors over $40 billion over ten years.
Loopholes in the retirement advice rules may have allowed some brokers and
advisers to recommend products:
• that put their own profits ahead of their clients' best interest
• where firms benefit from backdoor payments and hidden fees
• that have high costs and low returns — instead of recommending
more appropriate, quality investments.
Problem
Mission
Source: www.dol.gov/ebsa/newsroom/fsconflictsofinterest.html

2. 2
Department of Labor (DOL) Fiduciary Rule – An Overview
 The proposed rule applies to advice provided to:
– IRA account holders, including rollovers into an IRA
– individual participants and beneficiaries of employer-sponsored plans
– plan sponsors of ERISA plans, unless the carve-out applies.
 The Proposed rule:
– Requires a financial professional (advisor) giving investment advice to comply with the “fiduciary” standard, i.e. put
the clients financial interests before his or her own and where the account is a qualified [retirement] account
– Prohibits advisors from accepting any payments / compensation that create a conflict of interest unless they qualify
for an exemption intended to assure the customer is adequately protected
– Allows customers to take action for breach of contract and gives the DOL the right to bring enforcement actions
against fiduciary advisors, if they believe the fiduciary has not put the interests of the client first
– Defines retirement investment advice to exclude education and include the recommendation of specific investments.
Best Interest
Contract
Point of Sale
Disclosure Web Disclosure
The BIC Exemption: 4 Client - facing components
Annual Disclosure
 The DOL offers an exemption to prohibited transactions (which in turn, allows them) but requires certain
disclosures be put in place for the protection of the consumer.
– This exemption permits advisors to receive commission-based/ variable compensation from third parties.

3. 3
How people save for retirement
Non-Qualified
Government
• 403(b)
Schools
• 401(a)
State/local
• 457
State/local
Defined
Contribution
• Rollover
• Traditional
• Roth
• Inherited
• SEP-IRA*
• SIMPLE IRA**
• Brokerage
• Advisory
• Direct Mutual
Fund
• Cash Solicitor
IRA’s
ERISA Non-ERISA
Qualified (Tax-advantaged accounts)
ERISA - Employee Retirement Income Security Act - 1974
• DOL enforces ERISA
• Sets minimum standards for pension plans
• Provides protection for participants and beneficiaries
• Those who manage must meet ‘fiduciary’ standard of conduct
IRS Plans/
Accounts
• Pensions
Defined Benefit
Defined
Contribution
Other
(non-retirement)
• Brokerage
• Funds
• Equities
• ETF’s
• Savings
• Money Market
• CD’s
• 401(k) Private
• 401(a) Non-
Govt.
• 403(b)
sponsored by
tax-exempt
orgs
PTE 84-24 for FA’s
BIC for VA’s & all other
** SIMPLE IRA - Savings Incentive Match Plan for Employees* SEP IRA - Simplified Employees Pension

4. 4
Department of Labor (DOL) Fiduciary Rule – Main
Components
Best Interest
Contract
• Firm & advisor must
provide advice in the
best interests of client
• Discloses any conflict of
interests
• Warrants that the firm
has policies to mitigate
conflicts of interests
 Disclosure at time of
sale that shows:
 Fees, expenses
 Total Cost of
Investment if held
for 1, 5, 10 years at
a reasonable rate of
return
Point of Sale
• Products in the same
class should offer
same commission
levels and structures to
mitigate conflict of
interest
• Must consolidate comp
data to easily integrate
with other components
Compensation
• Annual disclosure must
provide:
• Actual fees &
expenses
• Actual
commissions paid
Annual
Disclosure
• A public webpage
that shows
• charges to
investor
• compensation
paid to the firm
and advisor
Web Disclosure

5. 5
How will this impact consumer, you, and the industry?
Consumer
Insurance
Company
The
Industry
 Advisors will be held to the “fiduciary” standard when providing advice for your IRA
 Certain disclosures may be necessary (BIC, POS, Web Page, Annual Disclosure)
 Clients will have the right to bring an action against the advisor if it is believed that a
fiduciary did not act in their best interest, failed to disclose, or violated any law. (Contract
can require arbitration but must give clients the right to bring a class action lawsuit if a group
of people are harmed)
 Must implement policy, procedure and systems to support and comply
with the BIC Exemption for Advisors to receive variable compensation.
 Must warrant it has identified & mitigated material conflicts of interest and
compensation structures that would encourage advisors to make
recommendations that are not in clients' best interests
 Training, Education and Communication
 Potential increase in litigation from consumers
 Potential increase in enforcement actions by DOL against
advisors
 Move to asset-based fee arrangements , fixed (indexed)
annuities
 Some broker dealers exiting the business

6. 6
DOL Rule – Next Steps for a Life Insurer