Boston, Massachusetts, June 6, 2016 – LifeYield, LLC, announced its tax-smart multi-account portfolio management software enables financial firms and their advisors to adhere to the toughest standards of the new fiduciary regulations issued by the U.S. Department of Labor (DOL). The new DOL rules place a fiduciary responsibility on advisors managing retirement accounts, requiring client interests be put first. The rules, issued on April 6, 2016, place the onus on firms to install processes to ensure the new standards are achieved on an ongoing basis.
LifeYield’s software enables an advisor to clearly show the benefits of consolidating assets through roll-overs and to justify asset-based fees by significantly expanding the scope of services. LifeYield also provides firms with processes to ensure advisors are acting as fiduciaries.
Two of the toughest provisions in the new rules are:
1) Advisors must adhere to “Impartial Conduct Standards” and,
2) A firm must put processes in place to ensure this occurs on an ongoing basis.
LifeYield’s software ensures both of these things happen.
Helping Advisors Adhere to the Rules
The Impartial Conduct Rules have three provisions:
1) Give advice in the client’s best interest;
2) Charge no more than reasonable fees;
3) And make no misleading statements about investment transactions, compensation, or conflicts of interest.
LifeYield provides the advisor with the rationale for the roll-over by providing better advice and services when a client consolidates assets. LifeYield coordinates a client’s:
• Taxable and tax–advantaged accounts
• Improves investor outcomes by minimizing taxes
• Maintains the target asset allocation, and,
• Tracks goal achievement over time.
While the DOL has not defined “reasonable compensation,” it indicates such factors as the scope of services the client is receiving and frequency of advice being given will be considered. LifeYield enables advisors to deliver customized services to the mass affluent that historically have been provided only to high net worth investors, and significantly expands the scope of services being delivered. And because LifeYield continuously monitors client accounts and automatically alerts advisors for such items as when action is needed to further minimize taxes or to get closer to the target allocation, the advisor can provide advice to the client frequently, further validating the advisor’s fee as reasonable.
Every purchase or sale suggested by LifeYield is supported by the rationale for each suggestion, such as for tax purposes or to more closely track the target allocation. This allows the advisor to be fully transparent about all investment transactions.
Helping Firms Comply
The new DOL rules require financial firms to implement policies and procedures designed to prevent advisors from violating the Impartial Conduct Rules. LifeYield helps ensure this by:
1) Enabling firms to monitor advisors’ activities by keeping an audit trail of why each buy or sell was suggested;
2) Automating the alert process to notify an advisor when a client’s portfolio needs attention; and,
3) Recommending specific financial products or models that are appropriate for each client.