May 2017 Edition   


As we get closer to the scheduled June 9 Fiduciary Rule applicability date and the operational changes that entails, it’s important to remember that all of our efforts go beyond just responding to a regulatory need. They are part of an ongoing evolution that we are committed to: The constant improvement of the experience you have with us, and members have with you.  

Our key purpose is educating and enabling members to understand the various investment products and services and what may be the right choices for their needs, reducing the fear many members may be feeling regarding the investment of significant portions of their assets and providing the access to financial products and services that can offer the income and security members need to fulfill their savings, retirement and legacy planning goals.

Thank you for continuing to look to CUNA Brokerage Services, Inc. (CBSI), your broker/dealer, for information and updates on the Fiduciary Rule. We will continue to provide you timely information and updates. If you have questions regarding this information, please contact us at


Fiduciary Rule Regulatory and Legislative Update.

A new leader at the Department of Labor (DOL), Secretary Alexander Acosta, was confirmed on April 27. Only very recently is the Secretary turning his attention to policy issues, including the Fiduciary Rule. Unofficial reports indicate that in at least one conversation with the Secretary, the DOL rule was named as a high priority for review. 

However, in a May 22 editorial in the Wall Street Journal, Secretary Acosta wrote that “We (DOL) have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input. Respect for the rule of law leads us to the conclusion that this date cannot be postponed.”

This would seem to make it clear that there will be NO further delay in the applicability of the rule elements for June 9.

While there is support in Congress for further delays and significant changes to the rule, there are many other Congressional opponents of any additional delays or changes. It may still be possible that we see some change by the Jan. 1, 2018 final applicability date as Secretary Acosta also wrote that “Trust in Americans’ ability to decide what is best for them and their families leads us to the conclusion that we should seek public comment on how to revise this rule.” But we’ll all have to stay tuned.


Rule Applicability Begins June 12.

Starting Monday, June 12, advisors as investment advice fiduciaries will be required to adhere to what the DOL refers to as an Impartial Conduct Standard. This is another way of referencing a Best Interest Standard of Care, but at this time, without the contract and disclosure requirements previously attached to the transitional period of the Rule. We will also be held to standards that require no materially misleading statements be made to clients (no different than today), and that there is no more than reasonable compensation to advisors.

What makes you an investment advice fiduciary under the Fiduciary Rule?

You become an investment advice fiduciary for Fiduciary Rule purposes when you provide advice about a qualified plan or IRA and receive compensation. The compensation part is generally straightforward: it can be a fee or other compensation like commissions or trails. Advice is a suggestion to act or not act. The advice includes strategies, portfolios, advice services, and management services including advice related to rollovers and investment of rollover assets. 

In summary, about any advice you give to a retirement plan participant or an IRA owner will probably make you an investment advice fiduciary.

Impartial Conduct Standard

Our role for members regardless of the Fiduciary Rule is to do what is right for them. The rule has provided an opportunity through the Impartial Conduct Standard for us to make our commitment to doing what is right even stronger. It will enhance CBSI’s ability to demonstrate that advisors are experts focused on a deep understanding of members’ investment planning and retirement savings goals.

Elements of the Impartial Conduct Standard can be viewed this way:

Holistic Member Experience: Provide care and attention as though it were for yourself. This is the opportunity to provide a holistic experience, capturing a broad, 360-degree view of members’ needs and goals to break down barriers of fear, complexity and access to financial security.

Advisor Skill and Knowledge: Your knowledge and skill can ease the anxiety members may feel about financial planning, as well as enhance your ability to reduce the complexity of investment services for members and make solutions easy to understand. CBSI is committed to on-going training for advisors. Advisors need to be committed to their ongoing skill improvement and ongoing education.

Prudent and Practical Advice: Your ability to determine, document and explain your advice in terms of a member’s individual needs and answer member questions in a simple, straightforward manner is key to breaking down the complexity that otherwise might stop a member from pursuing financial planning services. This is also an opportunity to educate and empower your member regarding your advice to them so that you can provide them clarity, reducing the complexity of their financial planning experience in both the short- and long-term.

Product Diligence: Both CBSI when providing product options and performing due diligence on product providers--and each advisor matching member needs with product features in a transparent manner--plays a key role in reinforcing for members that the recommendations they receive are purposely aligned to meet their individual circumstances. Members’ confidence in financial planning is rooted in knowing that they are being offered high-quality products that are easy to understand, reasonably priced, and that meet their needs and goals. 

Controls that CBSI implements regarding the Impartial Conduct Standard will be there to show that the advisor acted with the care, skill, prudence and diligence to make recommendations that met the investment objectives, risk tolerance, financial circumstances and needs of the member and displayed a duty of loyalty to the member.

The bottom line is that we must continue to look out for our member’s best interests in all the recommendations that we make to them.   


Standardized Advisor Practices.

Several steps in the process of working with members will need to become standardized starting June 12. These standards are applicable to all transactions, qualified or not.

Data Gathering: CBSI advisors should have always gathered information about members’ financial situation and goals before making any product recommendations. What is changing is that there is now a much greater emphasis on gathering detailed information about your member. To meet the Impartial Conduct Standard, an advisor will have to gather data to fully understand the member’s financial situation, needs, goals, and concerns. For some advisors who already do a thorough job of data gathering, this may involve very little additional information. For other advisors who are accustomed to gathering and recording/documenting “just the basics” this may require a significant increase in the amount of information needed.  

No matter which type of ‘data gatherer’ an advisor is, they will need to understand the essential data about a member that needs to be gathered. Section 2.8 of the CBSI Compliance manual provides an outline of member profile questions advisors should look to at a minimum to collect and document as a record of the information.

Starting June 12, advisors will be required to gather information about their members’ financial situation, goals, and objectives in a manner that is either accessible by CBSI Sales Managers, Dual Program Managers and Compliance, or easily provided upon request. Initially, this requirement can be met by using a paper fact finder (CBSI’s “Personal Profile” or something similar) or the “Personal Profile” section on Salesforce contact record.   

If the Salesforce option is utilized, no further action by the advisor will be needed as CBSI has access to those records when needed. If the advisor uses a paper tool to gather the needed information, we will be issuing further instructions on how to share with CBSI. For now, continue to retain paper copies in your files as you normally do.

Rationale and Recommendations 

The work that advisors do, including records and paperwork, must be available for review and supervision. This will include information gathered about the member’s financial goals and circumstances, recommendations of products to address their needs, rationale(s) for those recommendations, and the paperwork (physical or electronic) to implement those recommendations. 

While all advisors should currently be gathering this information and retain the required documentation of recommendations and the rationale(s) behind them, there is no standard process or procedure that all advisors follow. 

Starting June 12, advisors will be required to document their rationales for recommendations in Salesforce, and only in Salesforce, so that there is a central repository for this information. We are enhancing the Salesforce experience to make it easy for advisors to signify which activities were related to rationale.

Use of Financial Planning Tool

During 2016, CBSI advisors, home office, compliance, and training people undertook a thorough review of the planning tools available to CBSI advisors to address member’s needs and concerns. At the end of this process, MoneyGuidePro was selected as the primary financial tool for CBSI financial advisors to use to help assess their members’ financial situation.  

While not required at this time, CBSI advisors are encouraged to use MoneyGuidePro when appropriate to assess members’ financial needs and goals. For information on what is involved in adopting MoneyGuidePro to your practice, please contact your Sales Consultant.

Rollover Assessment Tool

A significant part of CBSI advisors’ business is helping members assess whether their retirement savings should remain in a former employer’s plan (401k, 403b, etc.) or whether they are better served by moving their account to an IRA that the advisor can assist with in its management.  

Ensuring that the member gets the best advice about whether to make such a rollover has been a key priority of CBSI as well as regulatory agencies in the past and has received renewed attention in the on-going discussion about the DOL Fiduciary Rule.

Our online rollover assessment tool will be available within a member’s Salesforce contact record. We anticipate it will be available as part of the recommendation process starting June 12, and we will require its use starting June 14. In essence, when making a determination on whether to rollover a 401(k) plan or not, use of the Rollover Assessment Tool will be required.

New Approved Product List 

CBSI’s Product Committee has reviewed all of the current product offerings available to advisors for their reasonableness with respect to: 

  • Fees and expenses,
  • Ability to report sales and balance data electronically, 
  • Offer competitive expenses/management fees,  
  • Being from demonstrably strong and sound organizations.   

As a result of this review CBSI’s “Approved Product List” has been streamlined to ensure that the products offered (mutual funds, annuities, managed accounts, and other investment products) meet the above criteria.  

Advisors are able to offer advice and receive compensation for any product on the Approved Product list. For members who own products that are no longer on the approved list, they may continue to make ongoing purchases and the advisor may still provide service on those accounts but may not provide advice on those accounts. 

This new approved product list will continue to feature those products that currently hold over 97% of CBSI’s member-invested assets. We are targeting introduction of the new approved product list to you by June 12, with its use being required by July 12. 


Training Resources.

We are developing training to help you understand more about the Fiduciary Rule and how the new process requirements will be incorporated into your sales process. Training we have planned includes:

  • DOL Overview eLearning modules accessible through The Center for Advisor ExcellenceTM. We are targeting June 1 to have these modules available--or soon thereafter.
    • DOL Module 1: “Fiduciary Rule Overview”:  Basics of what the rule is and does. This module will be a required element for all registered persons to complete.
    • DOL Module 2: “CBSI and the Fiduciary Rule”: High-level recap of module 1. Looks at changes to sales process; Salesforce and client data gathering; planning tools; product offerings. Although not required, advisors are highly encouraged to complete this module.
  • Rollover Assessment Tool training is targeted to be delivered both through an eLearning module and Quick Start Guide prior to June 12. The training will cover access and use of the online Rollover assessment tool. A recent  News You Can Use article on rollovers and the Rollover Assessment Tool has been published. The tool will be available as a selection in the Salesforce Contact Record. We have made the Rollover Assessment Tool intuitive and easy to complete. This training may be helpful as you begin using the tool.
  • A News You Can Use article on how to do better recommendation rationales is available. There may also be an eLearning module produced on this topic in the future.


Process Changes Are Required.

    It is important to immediately note that the process changes that are being implemented June 12 are not optional, but are required as part of a standardized process to ensure we are all meeting the requirements of the new Rule. CBSI is providing for a transition period from June 12 to Sept. 1 that will allow advisors and programs to become acclimated to the changes. This time frame will also allow CBSI to monitor compliance, and help identify advisors and programs that may need coaching and mentoring assistance with compliance.

    However, by Sept. 1, the new processes must be adopted and used. Transactions and accounts that do not follow the new process and documentation steps will result in a Not-In-Good-Order (NIGO) status and these orders and accounts will not be processed until the required steps are completed.

    Adapting to regulatory changes is a part of the financial services business that CBSI--and the CUNA Mutual Group overall-- are both experienced and adept at. But we have also used the Fiduciary Rule process to allow us to re-examine our business, focus emphasis on areas that improve the member experience, and improve an advisor’s ability to deliver access to great service and great products, all while building on the credit union-inspired purpose of doing what’s right for the member. We’re improving what we have always done well: Taking care of members, and empowering them to seek financial planning services.

    We will provide you with the support, service, training and transition time to make rule compliance as painless as possible. In return, we ask both your patience and your willingness to embrace change and adapt to the process differences required. 



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    Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution.