PIEtech℠, Inc, Creators of MoneyGuidePro®, Share DOL Opinion Letter from Expert Law Firm to Help Advisors

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In an unprecedented move, PIEtech℠, Inc. the creators of MoneyGuidePro®, have released a legal opinion letter from The Wagner Law Group related to the new Department of Labor Rule and Best Interest Contract Exemption Standards (DOL/BICE).

In an unprecedented move, PIEtech℠, Inc. the creators of MoneyGuidePro®, have released a legal opinion letter from The Wagner Law Group related to the new Department of Labor Rule and Best Interest Contract Exemption Standards (DOL/BICE). Many financial professionals have expressed concern in meeting the new requirements and are uncertain of where to start. PIEtech℠ has shared the opinion letter to help firms with a starting point in their DOL/BICE evaluations.

“We have been seeing a lot of firms focusing on things like a BICE contract and cost comparison. In reality once advice is delivered they should be asking, ‘Now what? How are we going to defend that our recommendations were in the best interest of the client?’” queries Kevin Knull, CFP®, President of PIEtech℠.

PIEtech℠‘s 2016 ‘What is a Quality Financial Plan?’ survey of over 1,650 financial professionals found that a majority of them feel that a quality financial plan is needed in order to fulfill the role of a fiduciary. Today, most clients do not have a financial plan and planning is seen as cumbersome and time consuming by most financial professionals. The survey found that only 24% of advisors delivered financial plans to a majority of their clients. Often, recommendations are made with a limited picture of the client’s goals, expectations and concerns. For example, the majority of advisors are not including health concerns or the specific costs of health care in retirement; which may result in product recommendations that are inappropriate for the client’s particular situation.

Traditional suitability questionnaires may be inadequate in the new DOL/BICE environment. In most cases, the questionnaires are limited in scope and may not take into account the client’s needs and objectives. A quality financial plan can help bridge the client understanding gap. The opinion letter states.

“… in our view, the MGP financial planning software would qualify as a client information-gathering and financial planning tool that a fiduciary advisor would be able to utilize in accordance with its duty to act with the care, skill, prudence and diligence of a prudent person under the BICE’s Best Interest Standard of Care. By utilizing the MGP software’s comprehensive input process, the software would enable the Rep to give appropriate consideration to the client’s needs and objectives. The objectively determined financial plan created by the MGP software would also enable the Rep to give appropriate consideration to whether any resulting investment recommendations are reasonably designed to meet the client’s needs and objectives.”

In an effort to help educate the industry and help advisors prepare for the DOL/BICE requirements, PIEtech℠ has been delivering webinars on DOL /BICE with Marcia Wagner, Esq., of The Wagner Law Group. Kevin Knull added, “While we’ve delivered educational content with Marcia Wagner, Esq., one of the foremost DOL experts, providing the opinion letter is meant to raise further awareness on the topic.”

Quality financial plans can help advisors comply with the requirements of DOL/BICE. As highlighted by The Wagner Law Group, “…Firms must adopt and comply with written compliance policies and procedures that are reasonably and prudently designed to prevent conflicts from causing any violations of the relevant fiduciary standards under the BICE.” With regards to requiring the use of MoneyGuidePro® (or other equivalent quality software) as BICE compliance policy the opinion letter states:

“… The ‘output’ that is generated by the MGP software includes goal funding strategies as well as asset allocation strategies and other related guidance that is shared with the client. Thus, this software output can help guide the Rep when making his or her investment recommendations. This software output can also confirm for the client that the Rep’s recommendations are consistent with the “Best Interest” standard. In our view, when adopted as part of a complete set of compliance policies and procedures, the adoption of a written policy that requires Reps to utilize high quality financial planning software such as MoneyGuidePro®, when advising new retirement clients, would be consistent with the BICE’s requirement for Firms to adopt compliance measures that are reasonably and prudently designed to prevent conflicts.”

Consumers benefit from developing quality financial plans with their advisors. The opinion letter states, “The MGP software is designed to give a Firm’s Reps the ability to develop a customized, high quality financial plan for each of their individual clients based on the key information that is elicited from the applicable client.” A process and plan that are focused on a full understanding of the client – their expectations, concerns and goals – can help ensure that their needs and objectives are met prior to an allocation or product recommendation.

Marcia Wagner added, “The use by retirement plan representatives of financial planning software such as PIEtech℠’s MoneyGuidePro®, can serve to significantly reduce the risk of exposure to fiduciary liability associated with providing investment advice under the DOL’s new fiduciary rule. The software is an effective tool designed to assist advisors in ensuring that they are providing recommendations that are objectively tailored to meet their clients’ retirement plan objectives and thereby complying with the DOL rule’s standard of care under the Best Interest Contract Exemption.”

To access the full opinion letter, visit http://go.moneyguidepro.com/fiduciaryrulepresentation. Kevin concludes, “Helping financial advisors get a better understanding of DOL/BICE and meeting the requirements is good for the industry and all consumers.”

About PIEtech℠, Inc.
PIEtech℠, Inc.’s vision is that everyone needs and deserves a quality financial plan. PIEtech℠ is the creator of MoneyGuidePro®, the industry’s leading financial planning software, and myMoneyGuide®, a client-driven digital planning solution that allows firms to broadly offer financial planning. For more information on PIEtech℠’s powerful financial planning solutions, visit http://www.moneyguidepro.com.

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Suly Salazar-Layton
PIEtech, Inc.
+1 (804) 744-5900 Ext: 122
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