ORLANDO, Fla., June 8, 2016 /PRNewswire/ -- Pershing LLC, a
BNY Mellon company, today announced its solutions and resources to
help financial services firms comply with the Department of Labor's
(DOL) Conflict of Interest rule. Over the past 18 months, Pershing
has been working to help firms understand the rule and developing
solutions, which it will soon start to roll out.
"While some aspects of the final version of the DOL's
Conflict of Interest Rule will be easier to implement than the
initial proposal, the essence of the rule is the same and it
could profoundly change financial services firms' operating models,
compensation arrangements and supervisory structures," said
Rob Cirrotti, managing director and
head of retirement and investment solutions at Pershing. "We've
identified various needs that have emerged as a result of the new
rule and have been working to develop solutions to help our clients
achieve success in this regulatory environment. The
combination of our new and existing tools helps our clients operate
as fiduciaries."
Each of the solutions and resources are designed to help
financial services firms address changes in the following key
areas: transitioning to an advisory model, exemption compliance,
supervision and surveillance.
Advisory Programs
The DOL rule is likely to impact the shift toward the advisory
model— as registered reps consider the switch from a
commission-based brokerage model where products are sold to
investors, to fee-based advisory relationships where products are
bought for investors. Pershing will launch the following new
advisory capabilities to assist with this transition:
- New mutual fund and/ETF wrap solutions designed to serve
emerging investors. Pershing clients will be able to access
expanded managed account solutions to help them serve a broad
spectrum of investors from emerging to mass affluent investors. The
solutions feature mutual fund/exchange traded fund (ETF) models
from industry leading firms designed to provide a diversified
risk-based portfolio with lower account minimums.
- Enhanced versions of Pershing's practice management
materials supporting the shift to advisory will be available.
Pershing also plans to roll out third-party tools to facilitate
conversations between registered reps and their clients on
transitioning accounts. Pershing is currently examining planning
tools and other resources that advisors may use to help with the
transition of client accounts where appropriate.
Prohibited Transaction Exemption Compliance
The industry will have to adapt to new compliance realities and
the nuances of prohibited transaction exemptions, which allow firms
and advisors to be compensated if certain conditions are met. In
response, Pershing is developing solutions to help firms and
registered reps who determine that compliance with the new
Best Interest Contract Exemption (BIC) is warranted. The solutions
will be designed to facilitate end-to-end compliance— from creating
contracts and disclosures to record-keeping. Pershing is also
developing programs for broker-dealers to manage contracts,
disclosure and controls to support their compliance needs.
Supervision and Surveillance
As a condition of the BIC exemption, firms and registered reps
will need to adhere to the Impartial Conduct Standards, which
includes using prudence when delivering investment advice. In light
of the prudence standard, Pershing expects that there will be a
greater need for surveillance and supervision to achieve compliance
and document evidence of it. Pershing is in the process of
determining which reporting packages and workflows need to be
created for firms to ensure their advisors are compliant.
Pershing is also examining enhancements to allow firms to supervise
and surveil assets on their platform.
For more resources from Pershing on the DOL's Conflict of
Interest Rule, visit https://www.pershing.com/dol .
About Pershing
Pershing and its affiliates provide global financial business
solutions to advisors, asset managers, broker-dealers, family
offices, registered investment advisor firms and wealth managers. A
financial services firm located in 23 offices worldwide, Pershing
provides business-to-business solutions to clients representing 6
million active investor accounts on the U.S. platform. Pershing
affiliates are members of every major U.S. securities exchange, and
its international affiliates are members of the Deutsche Börse,
Australian Stock Exchange, Irish Stock Exchange, London Stock
Exchange and Toronto Stock Exchange. Pershing LLC (member
FINRA/NYSE/SIPC) is a BNY Mellon company. Additional information is
available on pershing.com, or follow us on Twitter @Pershing.
About BNY Mellon
BNY Mellon is a global investments company dedicated to helping
its clients manage and service their financial assets throughout
the investment lifecycle. Whether providing financial services for
institutions, corporations or individual investors, BNY Mellon
delivers informed investment management and investment services in
35 countries and more than 100 markets. As of March 31, 2016, BNY Mellon had $29.1 trillion in assets under custody and/or
administration, and $1.6 trillion in
assets under management. BNY Mellon can act as a single point of
contact for clients looking to create, trade, hold, manage,
service, distribute or restructure investments. BNY Mellon is the
corporate brand of The Bank of New York Mellon Corporation (NYSE:
BK). Additional information is available on www.bnymellon.com.
Follow us on Twitter @BNYMellon or visit our newsroom at
www.bnymellon.com/newsroom for the latest company news.
Cassandra Osei
+1 201 413 3394
cassandra.osei@pershing.com
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SOURCE BNY Mellon