Treasury reminds financial firms about customer due diligence rule | Labor releases fiduciary rule's temporary enforcement policy | Strong US economy boosts small-cap firms
May 16, 2018
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Treasury reminds financial firms about customer due diligence rule
The Treasury Department's Financial Crimes Enforcement Network said the final version of its new customer due diligence rule has taken effect and that financial institutions must now begin complying with it. Among the new provisions is the requirement that financial firms identify and verify the identity of anyone who owns 25% or more of any legal entity and the identity of the person who controls the entity.
ThinkAdvisor (free registration) (5/14) 
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Labor releases fiduciary rule's temporary enforcement policy
The Labor Department said it won't enforce prohibited transactions under the fiduciary rule, which the US Court of Appeals for the 5th Circuit vacated, as long as fiduciaries are "working diligently and in good faith" to comply with applicable standards. The department said it will issue additional guidance later.
ThinkAdvisor (free registration) (5/7),  WealthManagement (5/7),  Pensions & Investments (free access for SmartBrief readers) (5/7) 
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Strong US economy boosts small-cap firms
Stock prices of small-capitalization companies are outperforming benchmarks that track global corporate giants, reflecting the expanding US economy. Corporate tax cuts have also contributed to strong performance among small-cap firms.
Reuters (5/14) 
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Around the Industry
NAIC looking to improve reserve, capital standards for variable annuity issuers
Two panels of the National Association of Insurance Commissioners are looking into revising the reserve and capital requirement standards for insurance companies that issue variable annuities. The panels are scheduled to hold meetings in Kansas City, Mo., to discuss the issue today.
ThinkAdvisor (free registration) (5/11) 
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Corporate-bond issuance down in 2018, data show
Issuance of corporate bonds has decreased 14% this year compared with the same period last year, industry data show. Growth in borrowing has been more sluggish, with Federal Reserve data for March showing a 2.5% increase in bank lending to companies, whereas the average monthly growth rate has been 7% for the past three years.
The New York Times (tiered subscription model) (5/10) 
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Washington Update
Peirce: SEC shouldn't waste resources on trivial infractions
Peirce: SEC shouldn't waste resources on trivial infractions
Peirce (Securities and Exchange Commission)
Securities and Exchange Commission member Hester Peirce said the enforcement division should focus on big cases, rather than pursuing minor violations. "Our goal is not to investigate for the sake of investigating but to protect the capital markets by focusing our efforts on the enforcement actions with the biggest impact," she said.
InvestmentNews (tiered subscription model) (5/11) 
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Research & Analysis
Expert: Annuities, hybrid insurance possible answers to LTC shortcomings
Conventional long-term care products aren't meeting Americans' needs, and new ways to save for long-term care expenses should to be developed, says PwC term-care specialist Larry Rubin. One possible solution would be for regulators to let employees self-fund LTC benefits with annuities, hybrid insurance or health savings accounts, he says.
Employee Benefit Adviser (free registration) (5/14) 
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Annuity's impact on Medicaid eligibility calls for careful review
Annuities can be helpful in preserving client assets while also maintaining eligibility for Medicaid long-term care benefits, but the rules are complicated and it is important to comply with them, according to elder law specialist Yale Hauptman. "There is great danger in attempting it and failing," he says.
Financial Advisor online (5/11) 
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Research: Suddenly losing retirement savings shortens people's lives
The sudden loss of 75% of a person's retirement savings increases his or her chances of dying within 20 years by 50%, but the consequences of never saving anything are worse, according to a study in the Journal of the American Medical Association. People who have never accumulated any significant retirement savings are 67% more likely to die within 20 years, the study found.
The Wall Street Journal (tiered subscription model) (5/11) 
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IRI Updates
Boomer Expectations for Retirement 2018
This year's boomer study demonstrates yet again the marked difference between boomers who have engaged financial professionals to help them build comprehensive and effective retirement plans, and those who have not. Read more here.
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Spring issue of IRI Insight now available!
All historic eras must come to an end, and at the Insured Retirement Institute, we're coming to the end of a great one and the start of a new one. In this issue of Insight, IRI's CEO, Cathy Weatherford, reflects on the past decade of IRI's accomplishments, and looks toward the future of IRI and the retirement income industry. Also in this issue of IRI Insight: "Summary: 2017 Tax Cuts and Jobs Act," "Protection, Growth and Income: New Research From IRI and AXA" and "Thwarting Elder Financial Abuse." Download your copy here.
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