RE: AIC Approach to Retirement Plan Business in Post-DOL Environment (June 9, 2017)

Transcription

1 Ameritas Investment Corp. Member FINRA/SIPC Date: June 2, 2017 To: AIC Registered Representatives RE: AIC Approach to Retirement Plan Business in Post-DOL Environment (June 9, 2017) The following announcement describes Ameritas Investment Corp. s (AIC) approach to managing RP business in a Post DOL Environment. See below for details on the AIC RP platform for doing business, the product shelf, reasonable compensation, and the business submission process. Enhancements to the services, resources, technology tools, and products offered should be expected in the coming year. Product Shelf Click here to view the AIC RP Product Offerings. AIC is open to reviewing additional retirement plan providers for possible inclusion on the shelf. Requests for additional reviews should be directed to Jay Jarvis at jjarvis@ameritas.com. Operating Model and Compensation Reps servicing retirement plans through AIC can conduct business as outlined below: New Business 1 (effective 6/9/17) Tier 1 A Non-Fiduciary: Education and Service (Broker Dealer) RRs may provide non-fiduciary services only to plan sponsors RRs must secure an independent 3(21) or 3(38) on all plans RRs must enter into a service agreement with the plan sponsor Compensation will be paid through the AIC grid Tier 1B Fiduciary: Commission Based (Broker Dealer) RRs must be pre-approved to act as a 3(21) RRs will be acting in a fiduciary capacity and may provide advice to plan sponsors RRs must enter into a service agreement with the plan sponsor BICE Disclosure required (no signature necessary) 1/1/18 requirement Compensation will be paid through the AIC grid Tier 2 Fiduciary: Fee Based (RIA) IARs must be pre-approved to act as a 3(21) IARs will be acting in a fiduciary capacity and may provide advice to plan sponsors 1 See Appendix Tables 1 & 2 for additional detail about the service offerings in each tier AIC For broker/dealer use only. Not for use with clients.

2 IARs must enter into a service agreement with the plan sponsor BICE Disclosure required for ALIC proprietary product sales only (no signature necessary) 1/1/18 requirement Compensation will be paid through the AIC grid Existing Business (effective 1/1/18) Tier 1 A Non-Fiduciary: Education and Service (Broker Dealer) RRs may provide non-fiduciary services only to plan sponsors RRs are encouraged to secure an independent 3(21) or 3(38) on all plans RRs must enter into a service agreement with the plan sponsor For non-fiduciary services, compensation on non-proprietary products will be paid through the AIC grid; compensation on existing proprietary products will continue to be paid outside the AIC grid Tier 1B and Tier 2 Fiduciary Services Same requirements as New Business Compensation The chart below represents the compensation maximums associated with each Tier and AUM range. Ondeposit commission is available for the GVA product only. Please note that the trail and on-deposit commission cannot exceed the maximum as a total compensation package. Reps are encouraged to benchmark the compensation they charge on a given plan against industry standards to ensure it is reasonable. As you assess the value of the services you are providing, AIC Management may grant exceptions to the compensation structure below. If you plan to request compensation that exceeds these limits, AIC will require detailed justification before considering for approval. AUM Ranges Tier 1A Education and Service Tier 1B Fiduciary Commission Based Tier 2 Fiduciary Fee Based < $3MM 100 bps 125 bps 125 bps TRAIL ON-DEPOSIT (GVA only) $3-10MM 50 bps 75 bps 75 bps $10-50MM 25 bps 25 bps 25 bps < $3MM 100 bps 125 bps N/A fee only $3-10MM 50 bps 75 bps N/A fee only $10-50MM 25 bps 25 bps N/A fee only New Business Paperwork Submission & Supervision Process (Forms will be available on Producer Workbench on or before 6/9/17) 1. Submit your sold case paperwork. It should include the following: a. Product and provider are both approved by AIC 2

3 b. A signed copy of the service agreement/408(b)(2) i. RP Service Agreement (Non-Fiduciary) ii. RP Commission Based Fiduciary Service Agreement iii. RP Consulting and Advisory Services Fee Agreement iv. RP Consulting and Advisory Services Agreement with Ameritas Life as a Recordkeeper c. A copy of the RP New Account Opening form i. RP New Account Opening Form d. A 3(21) or 3(38) has been named Note: if you are acting as a 3(21), you should verify that your status as a 3(21) has been pre-approved by AIC and is still in good order 2. If paperwork is approved, then you will receive an notification of pre-approval. Please retain a copy of the approval and a copy of the sold case paperwork you submitted. 3. Once approved, you may submit the sold case paperwork to the retirement plan provider *Note: RRs should continue to submit business through the same channels currently used 3(21) Approval Process RR/IARs must request approval to serve in a 3(21) capacity, whether on a commission basis through Tier 1B or on a fee-basis through Tier 2. Requests should be directed to AIC Compliance at aic_compliance@ameritas.com. You will be provided with a form detailing our requirements and documentation to be provided for review and potential approval. Further, RR/IARs may receive a request for interview with AIC staff to review documents submitted and clarify investment philosophies. All requests received are submitted to an AIC committee for review. Each RR/IAR is responsible for the timely submission of requested information prior to acting as a 3(21) in any capacity, at least 30 days prior to the anticipated date you would like to begin serving as a 3(21). RR/IARs may be approved unconditionally, subject to limitations, depending on qualifications, or the request may be denied. AIC is appreciative of your understanding as we continue to work through the DOL environment and work towards solutions to continue serving retirement plan clients. If you have any questions, please contact the Supervision Department at ext

4 Appendix Table 1 Required Services (to sponsor) 408(b)-2 Disclosures REQUIRED SERVICES (TO SPONSOR) Tier 1A: Education and Service Tier 1B: BD Fiduciary Tier 2: RIA Fiduciary Plan Governance & Committee Education Assist the sponsor to determine plan objectives Assist the plan sponsor to develop and maintain a fiduciary audit file Plan Service Provider Selection & Review Review fees and services & identify procedures to track the receipt and evaluation of ERISA 408(b)(2) disclosures Provide periodic benchmarking of fees and services to assist review for reasonableness Provide sample Investment Policy Statement (IPS) for Plan review and implementation Investment Education Draft Investment Policy Statement (IPS) for review and implementation Education on underlying investment fund options Educate on the five asset categories that are required by ERISA Annual/Ongoing Services Annual plan review (sponsor level: IA or IE depending on plan review) Provide investment performance information Table 2 Optional Services (to sponsor) Plan Governance & Committee Education 408(b)-2 Disclosures OPTIONAL SERVICES Review retirement plan committee structure and requirements Develop requirements for responding to participant requests for additional information Attend periodic meetings with plan committee as a non-fudiciary professional Tier 1: Education and Service Tier 2: BD Fiduciary Tier 3: RIA Fiduciary Provide education regarding third party providers Plan Service Provider Selection & Review Investment Education Assist plan sponsor to generate and evaluate service provider request for proposals (RFP) and/or requests for info. Assist with service provider transition and/or plan conversion Review appropriate funding vehicles for the plan Provide guidance on fund selection for the platform 4

5 Provide education on general principles of investing Provide education on outside model portfolios Annual/Ongoing Services Development of model/risk based portfolio's for plan sponsor Review Sponsor's participant education program and communication strategy, including ERISA 404(c) requirements Plan and implement customized employee education program In-person group education meetings, including re-enrollment Targeted group education meetings Review 404(c), 408(b)(2) and 404(a) compliance Provide education on fiduciary liability insurance and fiduciary bond coverage Annual plan review (participant level) Limited one-on-one meetings via telephone regarding retirement readiness RR provides enrollment education to participant Optional to Participant RR provides one-off participant education and answers to inquiries on plan design, e.g., loan provision, matching, etc. RR provides participant education on investment options In-person group education meetings, including re-enrollment Education on available model/risk based portfolio's Provide advice to plan participants (model portfolios, asset allocation, plan review, etc.) 5