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FolioDynamix solution helps firms prepare for DOL fiduciary rule change


The upcoming DOL Fiduciary Rule change finds many financial services firms scrambling to put steps and solutions in place to help advisors affected by the expansion of the “best interest standards” to individual retirement accounts and 401(k) rollovers. 

With confusion over both the dates involved and the actual provisions of the lengthy legislation, many firms are under the gun with some version of the legislation inevitable.

FolioDynamix has teamed up with industry research group Beacon Strategies, LLC to create a high-level whitepaper on the topic to help firms and advisors drill down to the actual impact of the rule. This new content was informed by a series of study groups focused on the DOL rule change with broker-dealer, insurance, and RIA firms across the industry, facilitated by Beacon.

“Philosophically, we are strong believers in fee transparency and believe it helps advisors build strong long-term practices – but recognise there are many circumstances in which commission business also makes sense. Our immediate concern is that this new rule will be both time consuming and potentially difficult for firms to administer,” says Steve Dunlap (pictured), president of FolioDynamix. “Our goal is to help wealth management firms navigate these waters while minimising the cost increases resulting from compliance to the rule.”

The whitepaper, released this week, explains the highlights of the legislation and covers ideas on best practices to avoid the expense and time consumed by executing the new “Best Interest Contract Exemption.” The researchers believe that firms should consider moving client accounts into the advisory space with its clearly disclosed fees and transparency into underlying investments.

FolioDynamix offers a solution that can help firms transition their commission-based business into advisory accounts. There are even options for smaller-balance accounts that might not normally meet managed account thresholds. Key firms have already begun taking advantage of this solution through models that include mutual funds chosen based on risk-tolerance assessments to help determine proper asset allocation. FolioDynamix trades these models and provides research and due diligence, allowing advisors to offer a separately-managed account option to investors of any size.

“Transparency has always been of utmost importance to our process in choosing managers and in turn, communicating with clients. It is one of the three main tenets of our comprehensive research and due diligence process,” says Shari Hensrud, CIO and president of FDX Advisors. “Our ability to leverage our own in-depth research and work closely with hand-picked investment managers allows us to put a solution in place to help investors of any size.”

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