Department of Labor issues Final Fiduciary Rule

first_imgThe Department of Labor (DOL) has released its long-awaited final fiduciary rule and clarified that IRAs—along with Archer medical savings accounts (MSAs), health savings accounts (HSAs), and Coverdell education savings accounts (ESAs)—are included in the scope of the final rule.The final rule expands the definition of “fiduciary” under the Employee Retirement Income Security Act of 1974 (ERISA), by redefining “investment advice” to encompass activities that occur within pension and retirement plans, but that do not constitute investment advice under the existing definition of investment advice. The DOL’s expanded definition of fiduciary of an employee benefit plan adds brokers and advisers providing advice to IRA, MSA, and HSA owners and ESA participants to the definition.The application of the final rule to MSAs, HSAs, and ESAs has received little media or industry attention, but it should come as no surprise, given the path taken by DOL to apply the rule to IRAs. Although IRAs were first authorized by ERISA, the DOL does not have direct regulatory authority over IRAs. IRA provisions are found only in the Internal Revenue Code (IRC) and fall outside of ERISA’s purview. Therefore, the Department of the Treasury—rather than the DOL—oversees most issues regarding IRAs.However, under Executive Order 12108, authority over certain issues related to prohibited transactions under IRC Section (Sec.) 4975, that govern the treatment of IRAs, was transferred from the Treasury Department to the DOL. The DOL has asserted that its authority over the prohibited transaction rules that govern IRAs extends to other non-ERISA plans covered by IRC Sec. 4975, including MSAs, HSAs, and ESAs, and grants the DOL authority to include these plans in the scope of the final rule.As defined in the final rule, investment advice includes providing investment or investment management recommendations, and includes recommendations to buy or sell investments, receive a distribution or execute a rollover or transfer, and manage investments. In addition to the receipt of direct or indirect compensation, for the relationship to rise to fiduciary status, there must bea representation or acknowledgement that the adviser is acting in a fiduciary capacity;advice given pursuant to a verbal or written agreement, arrangement, or understanding that it is individualized to the recipient; oradvice or a recommendation regarding an investing or account management decision related to a retirement plan, IRA, MSA, HSA, or ESA.The key to determining whether “fiduciary investment advice” has been given is whether a “recommendation” has occurred. This is defined as a communication that “would be reasonably viewed as a suggestion” to take a particular course of action, or refrain from doing so. The more the advice is tailored to the recipient, the more likely it will be viewed as a recommendation.The final rule will add additional compliance burdens to brokers and advisers providing advice to IRA, MSA, and HSA owners and ESA participants, including credit union service organizations (CUSOs) and, potentially, credit unions. Fortunately, the DOL made substantial changes to the proposed rule to incorporate feedback it received through written comments and public hearings, including a number of credit union concerns that the Credit Union National Association (CUNA) highlighted in the two comment letters it submitted during the comment period.As with any new regulation, allowing adequate time for implementation is essential, and the final rule extends the implementation date. Although the final rule is effective June 7, 2016, 60 days after it was published in the Federal Register, brokers and advisers will not be governed by the conduct and disclosure rules until April 10, 2017. And, a transition period for compliance with the best interest contract (BIC) exemption will be in place from that date until January 1, 2018, if certain conditions are met. Full compliance with the exemptions will be required as of January 1, 2018.Compliance with the BIC exemption—the contractual agreement between brokers and advisers and the recipients of their advice—also is simplified under the final rule. In cases where a signed BIC agreement is required—such as in an IRA rollover situation—the contract can be incorporated into other account opening documents, and can be entered into before or at the same time as the investment transaction is executed, instead of the time at which the investments are initially recommended.The final rule also clarifies the definitions of “investment advice” and “investment education” and provides a non-exhaustive list of certain types of communications that generally are not considered recommendations. The final rule clarifies that general communications such as newsletters, marketing materials, public presentations, investment reports, and nonpersonal information will not be considered recommendations giving rise to fiduciary status. For example, advising IRA owners that they are required to take a required minimum distribution from their IRA would not be treated as investment advice under the final rule.This change should allow credit unions to continue to provide members with general information about retirement savings and planning for the future. CUNA was concerned that under the proposed regulation, credit union members who look to their credit unions for information on saving for retirement would not have access to the financial advice that they need.It will take some time to fully analyze the DOL’s final rule, which is more than 600 pages in length. Credit unions generally will not be subject to the rule if they are not offering investment advice for a fee. However, credit unions should note that the final rule clarifies that the term “investment property” includes certificates of deposit and similar products. Credit unions would be well-advised to carefully review the final rule and how it will affect their policies and procedures. This is especially true if they offer investment services through CUSOs or third-party brokers, or plan to offer investment services in the future. 14SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Dennis Zuehlke Dennis is Compliance Manager for Ascensus. Mr. Zuehlke provides clients with technical support on tax-advantaged accounts (including individual retirement accounts, health savings accounts, simplified employee pension plans, and Coverdell education … Web: www.ascensus.com Detailslast_img read more

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Queensland’s most popular streets: Why everyone wants to live here

first_imgThis house at 50 Dauphin Tce, Highgate Hill, is on the market for $11m. To meet the data requirements, the streets needed at least five listings onsite over the three-year period.Dauphin Terrace, just 2.5km from Brisbane’s CBD, has attracted plenty of attention recently because of a waterfront mansion that is currently on the market for an eye-watering $11 million. The trophy home at 50 Dauphin Tce has two street frontage, two self-contained guest quarters, 60m river frontage, a pontoon for a 60m vessel, seven bedrooms, four bathrooms, parking for five cars, a 23m gas-heated pool, four separate decks, an electronic boat lift and a boathouse. This house at 17 Glauca St, Burleigh Heads, is for sale.Streets in Tugun, Currumbin Waters and Mermaid Waters are also in demand among home hunters.In Brisbane, Ashfield Street in East Brisbane is the third most sought-after street in Queensland, according to realestate.com.au.A luxury, Hamptons-style new build in the street sold for $4 million last year. MORE: New home hot spots revealed This house at 10 Morgan St, Ascot, is for sale.More from newsParks and wildlife the new lust-haves post coronavirus13 hours agoNoosa’s best beachfront penthouse is about to hit the market13 hours agoDalma Street in Norman Park, in Brisbane’s inner east, is also one of the state’s most in-demand suburbs.Alison and Matthew Clayton have lived in their house at 10 Dalma Street for the past five years since moving from Sydney to Brisbane for work.The family is now downsizing as the kids have almost flown the coup, but they are reluctant to leave.“I’m not surprised at all (that it’s one of the most popular streets) and now the secret’s going to be out,” Mrs Clayton said.“One of the best things about living here would be the great mix of families — it’s just a lovely family-orientated street.“We’ve even met our senior of the street, Les, who’s in his 80s.“He and his wife and family were one of the first to move here when the street was brand new and he’s still here so must love it.”Mrs Clayton said they had Perth Street Park on their doorstep, where children loved to play and dogs could let loose in the offleash area.“Just up the hill from the park is Camp Hill Bowls Club, so we can stroll up the hill to the bowls club whenever we like,” she said.Marketing agent Tammy Dale of Place – Bulimba said Dalma Street was a cul-de-sac and “extremely popular” among families because it was in sought-after school catchment zones.“It’s also proximity to the city and the Gateway (motorway),” Ms Dale said.“It is fairly tightly-held — people don’t move as often in those pockets because once they get in with the school catchment, they want to stay put.”QUEENSLAND’S 20 MOST POPULAR STREETS FOR BUYERS Street Name Suburb Postcode 1. Dauphin Terrace Highgate Hill 4101 2. Ladds Ridge Road Burleigh Heads 4220 3. Ashfield Street East Brisbane 41694. Glauca Street Burleigh Heads 42205. Bronhill Street Currumbin Waters 42236. Timana Avenue Mermaid Waters 42187. Bridgeman Road Bridgeman Downs 40358. Hethorn Street Coorparoo 41519. Dobell Street Indooroopilly 406810. Morgan Street Ascot 400711. Matilda Street Burleigh Heads 422012. French Street Tugun 422413. Dalma Street Norman Park 417014. Greycliffe Street Mount Gravatt East 412215. Anzac Road Eudlo 455416. Harefield Street Indooroopilly 406817. Sirec Way Burleigh Heads 422018. Merion Place Carindale 415219. Euree Street Kenmore 406920. Cowell Drive Burleigh Heads 4220(Source: Realestate.com.au) Dauphin Terrace in Highgate Hill is the most in-demand street in Queensland for home buyers, according to Realestate.com.au.The so-called ‘Great Gatsby’ mansion sits on almost 4000 sqm of prime real estate — a site where General Douglas MacArthur once led the Pacific campaign.The popular beachside hub of Burleigh Heads on the Gold Coast has five streets in the top 20 most sought-after list, including Glauca Street, where a five-bedroom house is currently for sale for offers over $650,000.center_img This house at 7 Ashfield St, East Brisbane, sold for $4m. Bridgeman Road in Bridgeman Downs is renowned for its prestige homes on large blocks of land, which is perhaps why it is number seven on the list of most popular streets in the state.A seven-bedroom house on 1ha of land is on the market right now for offers over $2.25 million. Morgan Street in the blue-chip suburb of Ascot rounds out the top 10.A luxury home in the sought-after street has been on the market since 2016 and is currently rented for the highest rental price in Brisbane’s history of $5500 a week. Alison and Matthew Clayton and son Sean at their Norman Park home. Picture: Peter Wallis.IT sits high above the Brisbane River, offers its residents complete privacy and is home to one of the city’s most extravagant properties. Dauphin Terrace in Highgate Hill has been revealed as the 11th most sought-after street in the country among prospective home buyers — and the most popular street in Queensland.New analysis from online property portal, Realestate.com.au, has uncovered the most in-demand streets for buyers in Australia, based on views per property listing over the past three years. RELATED: Iconic riverfront home sellslast_img read more

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JPMorgan Chase Citi and Wells Fargo Announce Q1 Earnings

first_img The first quarter earnings season kicked off with a bang on Friday with JPMorgan Chase, Citibank, and Wells Fargo announcing their financial results for Q1 that beat market expectations. Here’s how each bank performed during the quarter:Record Profits for JPMorgan ChaseJPMorgan Chase announced record earnings for the first quarter reporting revenue of $27.9 billion during the quarter against $24.9 billion recorded during the same period last year. The bank’s average deposits were up 6 percent to $660 billion and its average core loans were up 8 percent.“We have been outpacing the industry on consumer deposit growth while attracting significant net new money and growing client investment assets 13 percent,” said Jamie Dimon, Chairman, and CEO of JPMorgan Chase in a statement. Card sales and merchant processing volume both grew double digits, reflecting our investments in new products and innovation focused on our customers’ needs.”The bank’s net income increased 35 percent to $8.7 billion during the quarter. The bank said that its net interest income had risen 9 percent to $13.5 billion, driven by the impact of higher rates and loan growth and was partially offset by lower markets net interest income. However, lending remained flat during the quarter. “Despite client sentiment remaining high, the environment is intensely competitive and lending was flat for the quarter. Our asset and wealth management business delivered strong results, with long-term net inflows this quarter across all regions, even as volatility returned to the market,” Dimon said.Citibank Boosts Earnings on Stocks and TaxesCitigroup grew its revenue across institutional and consumer businesses to deliver solid revenue during the quarter. The Bank recorded a net income of $4.6 billion during the quarter on revenues of $18.9 billion. This compared to net income of $4.1 billion on revenues of $18.4 billion for the first quarter 2017.“Our first quarter results demonstrate strength and balance across our franchise and position us well for the rest of the year,” said Michael Corbat, CEO, Citi. “In addition to improving Citi’s return on capital, we maintained our focus on also improving Citi’s return on capital. During the quarter, we returned more than $3 billion in capital to common shareholders which helped drive a significant improvement in earnings per share.”The bank said its net income increased 13 percent to $4.6 billion driven by higher revenues and a lower effective tax rate that was partially offset by higher expenses and cost of credit.Wells Fargo Tops EstimatesWells Fargo’s earnings topped industry estimates despite a tough quarter for the financial bellwether. The bank reported a net income of $5.9 billion, which was up from $5.6 billion in the first quarter of 2017. While the bank’s revenue was down to $21.9 billion from $22.3 billion, it reported an increase in earnings per share of $1.12 compared with $1.03 in the same period last year.“I’m confident that our outstanding team will continue to transform Wells Fargo into a better, stronger company; however, we recognize that it will take time to put all of our challenges behind us,” said Tim Sloane CEO, Wells Fargo. “During the first quarter, our team members continued to focus on our vision of satisfying our customers’ financial needs and helping them succeed financially. We also made progress on our priority of rebuilding trust with our customers, team members, communities, regulators, and shareholders.”Wells Fargo said that the net income reported in the first quarter is subject to the resolutions of the CFPB/OCC matter and that its earnings performance included continued strong credit performance, liquidity, and capital levels. “We returned $4 billion to shareholders through common stock dividends and net share repurchases in the first quarter, up 30 percent from a year ago,” said John Shrewsberry, CFO, Wells Fargo. “Our capital remained well above our internal target, and returning more capital to shareholders remains a priority.” in Daily Dose, Featured, News, Origination JPMorgan Chase, Citi, and Wells Fargo Announce Q1 Earnings CitiBank JPMorgan Chase Lending Net Income Wells Fargo 2018-04-13 Radhika Ojhacenter_img April 13, 2018 677 Views Sharelast_img read more

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