For more articles from Kristen Beckman, visit LifeHealthPro.com/author/kristen-beckman
One benefit of being a
mom of tweens is having an
excuse to read their books. i
love reading, but i feel a bit
out of place perusing the
young adult section at the
library for fun, quick novels
rather than picking up more
weighty tomes like “War and
Peace” in the adult fiction
section. Let’s face it, with
tweens in my house, i need
more fun, quick and less
Recently, my son was assigned a book called “Life as
We Knew it,” by Susan beth Pfeffer. i ended up stealing
it from him and reading the entire book in one sitting.
The story follows the struggles of a high school girl and
her family after an asteroid hits the moon and causes a
variety of increasingly dire consequences for the people
The characters knew the impact was going to happen,
and initially, they weren’t too concerned. but chaos
quickly ensued when the impact was larger than expected
and the moon was knocked out of its orbit, causing
changes in the ocean tides that led to mass destruction
of the world’s infrastructure.
but for most of the world not directly impacted by
the initial destruction, day-to-day life didn’t change all
that much. At least not right away. everybody knew
things were now radically different, but they weren’t
sure exactly what that would mean for them on a
personal level. it turns out the consequences for the
characters would be immense, but they happened
gradually over a long period of time.
i wonder if the industry will soon be thinking back
to its pre-DOL-rule days as “life as we knew it.” There
are many similarities — anticipation of a significant
event, chaos and confusion in the immediate after-
math, and then a settling in while the consequences
begin to reveal themselves.
LiMRA’s CeO bob Kerzner, speaking at the
association’s retirement industry conference last
month, said he believes the DOL rule will cause seismic
change within the industry. Many people believe the
rule will cause dramatic changes, but there is no clear
consensus on what those changes will be.
Some speculate products will become more vanilla
as advisors recommend products that are simpler, have
higher guarantees and are manufactured by A+ rated
carriers. Others believe this phenomenon will actually
spur innovation rather than stifle it because lower-rated
companies will develop unique features to differentiate
themselves from competitors and better fit individual
Another uncertainty is how the rule will impact
compensation. Some believe the days of commissions
may be numbered and fee-only advisory will flourish.
Certainly commissions will face scrutiny under the rule,
and some predict high commission-based advice will be
targeted in initial lawsuits. but not everybody believes
fee-based compensation is the only possibility in the
future. A rationalization of commissions seems as
likely as a forklift operation to fee-only models.
How distribution will be impacted is another unknown. Under the rule, carriers, banks, broker-dealers
and RiAs can sign best interest contracts with consumers
as designated financial institutions. Where does that
leave iMOs and insurance-only agents with no affiliation?
nobody seems to know.
for now, i sense people in our industry, like the
characters in the book, are stealing glances at the moon,
knowing things are not quite the same but not sure
how exactly this new reality will affect them over the
long term. Perhaps some are preparing to comply while
others are hoping challenges to the law will allow life to
go back to the way it was before.
How do you think the fiduciary rule will impact
your practice? i welcome your comments at