Distribution Disruption: Impacts of the Department of Labor Fiduciary Standard for US Life Insurers

REPORT PREVIOUSLY PUBLISHED BY OLIVER WYMAN
March 28, 2016
Regulation
North America

Abstract

The Department of Labor’s latest proposal to expand the definition of a fiduciary under the Employee Retirement Income Security Act (ERISA) will cause significant disruption to the advice landscape surrounding 401K rollovers and IRAs and will have substantial knock-on effects for retail insurance distribution channels generally.

In this report, Distribution Disruption: Impacts of the Department of Labor Fiduciary Standard for US Life Insurers, the authors summarize views that they have validated through a series of interviews and discussions with a cross-section of industry leaders and subject matter experts. They believe that insurers should be considering the standard carefully, quantifying exposures under a range of impact scenarios, and developing strategic plans around portfolio strategy, distribution, and product innovations.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

What’s Happening?

3

What Lessons Can We Learn from Elsewhere?

5

What Do We Think Insurers Should Be Doing Now to Prepare?

6

Conclusion

7

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