DOL Fiduciary Rule Struck Down by Appeals Court

The U.S. Court of Appeals for the Fifth Circuit (which covers Texas, Louisiana and Mississippi), in a surprising 2-1 decision late yesterday, overturned a lower court decision and vacated the U.S. Department of Labor’s fiduciary rule with respect to retirement advice.

The court held that the agency exceeded its statutory authority under retirement law (ERISA) in promulgating the measure. The rule requires that advisors act in the best interests of their clients in retirement accounts and had survived repeated previous court challenges.

The Fifth Circuit decision came just one day after the U.S. Court of Appeals for the Tenth Circuit held that the DOL did not “arbitrarily treat fixed indexed annuities differently from [traditional] fixed annuities” under its fiduciary rule. Meanwhile, the U.S. Court of Appeals for the D.C. Circuit still has an active case considering the efficacy of the DOL fiduciary rule. None of these intermediate appellate courts is bound by decisions of the others.

According to the Fifth Circuit panel majority’s decision, the DOL acted unreasonably, arbitrarily and capriciously in expanding a 40-year-old definition of “investment advice fiduciary,” and did not deserve the deference that courts usually accord federal agencies. The court noted that while the DOL “has made no secret of its intent to transform the trillion-dollar market” for retirement investments, it was “not hard to spot regulatory abuse of power when an agency claims to discover in a long-extant statute an unheralded power to regulate a significant portion of the American economy.” Moreover, “far from confining the Fiduciary Rule to IRA investors’ transactions, DOL’s regulations affect dramatic industry-wide changes because it’s impractical to separate IRA transactions from non-IRA securities advice and brokerage. Rather than infringing on SEC turf, DOL ought to have deferred to Congress’s very specific Dodd-Frank delegations and conferred with and supported SEC practices to assist IRA and all other individual investors.”

Chief Judge Carl Stewart’s dissenting opinion argues that “the DOL acted well within the confines set by Congress in implementing the challenged regulatory package, and said package should be maintained so long as the agency’s interpretation is reasonable.” In his view, “That the DOL has extended its regulatory reach to cover more investment-advice fiduciaries and to impose additional conditions on conflicted transactions neither requires nor lends to the panel majority’s conclusion that it has acted contrary to Congress’ directive.”

In a joint statement, the Fifth Circuit plaintiffs (including the Financial Services Institute, the Securities Industry and Financial Markets Association, and the U.S. Chamber of Commerce) stated that “the court has ruled on the side of America’s retirement savers, preserving access to affordable financial advice. Our organizations have long supported the development of a best interest standard of care and the Securities and Exchange Commission should now take the lead on a clear, consistent, and workable standard that does not limit choice for investors.” It is still unclear what the fate of the DOL rule is going to be. The federal appeals courts are split on its legality. The DOL is going to have to decide how it wants to proceed. Typically, in a case such as this, a federal agency would decide whether to ask the full Fifth Circuit to reconsider the decision en banc or to appeal the case directly to the U.S. Supreme Court. However, this matter is further complicated in that the Trump Administration’s commitment to the DOL rule is unclear at best.

The SEC, meanwhile, has been examining whether to craft its own higher standard of client care. FSI and other industry stakeholders have continued to emphasize that they support such an SEC-created uniform fiduciary standard. These stakeholders have met numerous times with the leadership of the SEC in an effort constructively to engage with the regulators with respect to the creation of that standard. Those efforts will continue. We should not expect clarity about the DOL rule for some time yet. As always, I will keep you apprised as matters develop. Moreover, while we wait to see what happens next, I encourage you to contact me with any questions you may have.

Robert P. Seawright
Chief Investment & Information Officer
Madison Avenue Securities, LLC

Roger Ibbotson

Roger Ibbotson, economist and creator of the iconic “Stock, Bonds, Bills, and Inflation” (SBBI®) chart, today unveiled his latest research that analyzed the emerging potential of Fixed Indexed Annuities (FIA) as an alternative to bonds in retirement portfolios.
READ MORE at PR Newswire »

Building a Successful Marketing Plan

Growth doesn’t just happen. You have to plan for it.

Written by: Skott McKinney, Director of Marketing & Creative Services at Asset Marketing Systems

A strong marketing plan can be essential to your business success, allowing you to capitalize on your strengths, focus on your highest potential clients and relationships, and deliver your message effectively.

In this workbook, we’ll show you how to create a marketing plan in four steps.

  • Identify an ideal client or a target market.
  • Choose appropriate tools and tactics.
  • Develop a tactical plan and a marketing budget.
  • Track results and make adjustments.

Our goal is give you the tools to make marketing an integral part of your business — to help you set yourself apart from the competition and win and sustain profitable relationships.

Download PDF

Nationwide New Heights

The Nationwide New Heights is not a new product but certainly needs more attention. The New Heights can accomplish quite a bit. Accumulation, Safety, Income, and Legacy. While many of us may already be familiar with the accumulation potential, I will still discuss some recent stats and information on the accumulation. However, I really would like to point out the income story the product provides and make sure none of us are missing opportunities by not adding the New Heights High Point 365 income rider.

On January 15, 2018, Nationwide increased the participation rates by 5% on the JP Morgan Mozaic II index. The JP Morgan Mozaic II index replaced the JP Morgan Mozaic I last year and performed just as well over the two-year period since the New Heights 12 has been available. The JP Morgan Mozaic II 2017 return was 9.02% on New Heights 12 contracts, and the two-year return would have been 24.32%. The index is designed to provide consistent and reasonable rates of return in any market condition. We often use the baseball analogy when we refer to the Mozaic II calling it the “single and doubles” hitter versus the homerun hitter. Let me explain, in the year 2000 through 2002, the index itself (without increased participation that we currently and have had on the product) would have returns of 6.30%, 2.37%, and 6.74% respectively. (LINK TO JP MORGAN MOZAIC II Performance – In 2008 when we saw losses of 40% in the S&P 500 the JP Morgan Mozaic II index would have returned 4.27%. Likewise, in 2013 when we saw substantial growth upward of 30% in the S&P 500, the JP Morgan Mozaic II would have had a return of 7.65%. Why is this important? We’re trying to compete with securities based product returns, but with our markets at all-time highs why would you not allocate a significant portion of a client’s portfolio to a product that can continue to provide reliable and reasonable returns with much less volatility and risk. Click here for the Nationwide New Heights 12 year rates or click here for the Nationwide New Heights 9 year rates.

See the JP Morgan Mozaic Index II brochure here to learn about the index and understand why and how it provides these consistent returns.

For those of you who have heard of Roger Ibbotson, his ZEBRA Edge NYSE index (the only FIA index branded on the NYSE) is also on the Nationwide New Heights with as high as a 135% participation and 1% spread.

The ZEBRA index gives you much more exposure to US Equities than the JP Morgan Mozaic II index would. The NYSE ZEBRA picks from US equities balancing into “cool stocks” versus “Hot stocks.” The index evaluates all 500 of the most significant publicly traded companies in the US every quarter and removes the most popular and volatile ones. The index selects an average of 197 stocks, at which point the NYSE applies a risk control methodology that makes daily adjustments to these stocks, US Treasuries, and cash.

The actual return to the Nationwide New Heights last year using this strategy was 19.55%, and the two-year return was 26.06%.

Click here to learn more about the Zebra Index Brochure, and to read an informational whitepaper authored by Roger Ibbotson and Zebra capital.

Once you understand the New Heights income rider, you will also appreciate the death benefit rider. At Asset Marketing Systems, we have had a low percentage of Nationwide New Heights contracts issued with their High Point 365 Income rider, which has a cost of 0.95% per year. We are seeing that many advisors are using the product as an accumulation and safety product only, and would prefer not to have the rider fee. We’re not trying to compete with securities based product returns, but with our markets at all-time highs, why would you not allocate a significant portion of a client’s portfolio to a product that can continue to provide reliable and reasonable returns with less volatility and risk.

It’s often easier to sell a product that has an income rider without a fee, but that product typically “charges” the client in the form of a lower cap or higher spread, which often results in lower accumulation potential. I would imagine if the Nationwide New Heights had a 100% participation with no spread or fee, but gave you the income rider for free, you would be very interested in the income rider, right?

The Nationwide High Point 365 rider has a five-year deferral requirement before activating income. The withdrawal factors increase, and the income base continues to increase even when taking free withdrawals. Your client can take free withdrawals from the contract years 2-5 to get to that guaranteed income in year six.

As many of us know, this product can track values daily, allowing them to lock in your income value at that highest daily value. Your income base is the highest point on any given day of the entire contract period before you trigger your income.

How big of a deal is this? Well to give you an idea, just last year in 2017, the JP Morgan Mozaic II index had 57 different high points! That means 57 times last year you had a reason to call your client and let them know their income guarantee just went up 57 times! While we all know this is not going to happen every year, it is an incredible story.

What rate of return are you comfortable assuming on this contract in the first five years? Is it 2%? Perhaps 4%? Maybe 6 or 7%? Whatever that number is and whatever you are comfortable with, consider the highest daily value in that number and consider what the income would be even if you did assume an extremely conservative ROR during deferral before income. If we do a little math with conservative assumptions, we will quickly understand why this could be the best income rider in the business.

Nationwide uses this highest daily value to calculate your income amount. They also use a very fast and annually increasing payout factor. For those of you familiar with the Allianz 360 income factors, it is similar to those. Click here to see the income factors at each age and deferral. For case studies, click here.

The Nationwide High Point Death benefit rider is calculated the same way as the income value. Using the same method, they find the highest daily value, which becomes your death benefit. Furthermore, Nationwide has the only product on the market that allows a first to die feature (for no cost) and allows a first to die rider on a single owned annuity (even qualified money). There are many strategies and unique planning options around the first to die feature, which will only help your clients.

Lastly, you should consider the fact that this product is offered through an A+ Mutual carrier. To this date, I’m not aware of a mutual carrier who offers a fixed indexed annuity that can come close to competing with this product.

DOL Update 11/28


The U.S. Department of Labor has announced an 18-month extension from Jan. 1, 2018, to July 1, 2019, of the special Transition Period for the Fiduciary Rule’s Best Interest Contract Exemption and the Principal Transactions Exemption, and of the applicability of certain amendments to Prohibited Transaction Exemption 84-24 (PTEs). This follows public comment on a proposed extension that was published in August.

The extension gives the Department the time necessary to consider public comments submitted pursuant to the Department’s July Request for Information, and the criteria set forth in the Presidential Memorandum of Feb. 3, 2017, including whether possible changes and alternatives to exemptions would be appropriate in light of the current comment record and potential input from, and action by the Securities and Exchange Commission, state insurance commissioners and other regulators. The President directed the Department to prepare an updated analysis of the likely impact of the Fiduciary Rule on access to retirement information and financial advice.

During the extended Transition Period, fiduciary advisers have an obligation to give advice that adheres to “impartial conduct standards.” These fiduciary standards require advisers to adhere to a best interest standard when making investment recommendations, charge no more than reasonable compensation for their services, and refrain from making misleading statements.

Further, between now and July 1, 2019, when the exemptions’ remaining conditions are scheduled to become applicable, the Department intends to complete its review under the Presidential Memorandum and decide whether to propose further changes.

The Department has also announced an extension of the temporary enforcement policy contained in Field Assistance Bulletin 2017-02 to cover the 18-month extension period. Thus, from June 9, 2017, to July 1, 2019, the Department will not pursue claims against fiduciaries working diligently and in good faith to comply with the Fiduciary Rule and PTEs, or treat those fiduciaries as being in violation of the Fiduciary Rule and PTEs.

Source: United States Department of Labor

3 Ways to bridge the Gender Savings Gap

This post originally appeared on the National Life Group Main Street blog on 3/9. By Maria McLendon.

When it comes to savings, the gender savings gap is huge. A recent study[1] indicated that women have 50% lower savings than their male counterparts. There are a number of reasons that this disparity exists, among these are that, on average, women earn lower salaries than their male counterparts and will spend fewer years in the workforce. However, there are actions that women can take right now, that will help improve their savings and provide a bridge to end the gender savings gap.

1) Start Now

The very first step to eliminating the Gender Savings gap is for women of all ages to start saving now. If you are a parent of a young daughter, start saving on her behalf—even if it is coins in a piggy bank. If you are a young woman just starting your career, start saving now—even if it is just a few dollars a week. By the time you are in your 30s, you should be saving 10-15% of your income and the sooner you start, the more quickly you can get to that rate of savings.

2) Make Consistent, Incremental Increases

Commit to increasing your rate of savings every year. Increasing the amount you save by just $25/month every year could mean that you will have $5,000 more in retirement savings, and an increase of $150/month[2] every year could mean more than $34,000 in savings when you get to retirement.

Check out this image for more ways that incremental increases can make a positive impact on your long-term savings balance.

3) Keep Things Balanced

Make sure that at least a portion of your savings is in lower-risk products that are not subject to loss from economic or stock market volatility. Fixed Annuities and Fixed Indexed Annuities are insurance products that offer guaranteed[3] rates of interest, protect your principle and interest from loss due to market downturns (assuming you don’t make any early withdrawals), and can offer the advantages of tax-deferred savings when part of a retirement plan.

The surest way to make change is to take action. Do something today to help close the gender savings gap for tomorrow.

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[1] Women versus men in DC Plans, Vanguard white paper, October 2015.

[2] Assumes a 3% rate of return for 15 years before taxes are assessed. This is a hypothetical example for illustrative purposes only – not representative of any particular investment or insurance product.

[3] Guarantees are dependent on the claims paying ability of the issuing Company. Because they are meant for long-term accumulation, most annuities have surrender charges that are assessed during the early years of the contract if the contract owner surrenders the annuity. In addition, withdrawals prior to age 59 ½ may be subject to a 10% Federal Tax Penalty. All withdrawals made from annuities with pre-tax contributions are taxed as ordinary income. All withdrawals from an annuity purchased with non-qualified monies are taxable as ordinary income only to the extent there is a gain in the policy. Indexed annuities do not directly participate in any stock or equity investments. This is not a solicitation of any specific annuity contract.

Top Retirement Trends for Baby Boomers

With the first baby boomers retiring from the workforce in large numbers, many are wondering how the new retirees are supporting their new-found free time.

A recent Census Bureau report gathered data on the most recent non-workers, and the following 11 facts from the survey point to trends.

  1. America is getting older. While the nearly 40 million Americans age 65 and older currently make up 13 percent of the total population, the 65+ set will rise to 20 percent of the American population by 2030. Within that time, the American median age will increase from 37.2 years to 39.6 years—a surge from a median age under 30 in the 1960s and ’70s.
  2. But Americans are still young relative to the developed world. While the United States is aging rapidly, Canada, Japan, and the majority of Europe have older populations in comparison.
  3. Diversity among the “graying” America. Approximately 15 percent of whites polled are over the age of 65, whereas 9.4 percent of the Asian respondents, 8.8 percent of blacks polled, and 5.5 percent of Hispanic survey takers were over 65.
  4. Where are more seniors living? 11 states have more than 1 million people age 65 and over, with California topping the list at 4.3 million. Florida, West Virginia, Maine, and Pennsylvania round out the top five. Bringing up the rear in senior citizen proportions are Alaska, Utah, and Texas.
  5. Longer life. The average life expectancy for a 65-year-old American male is 17.7 years, and 20.3 years for a 65-year-old American female. Both figures are gains of 3-4 years compared to the previous generation. Senior citizens that are 75 years old can expect to live another 11 years if they are men and 13 additional years if they are women.
  6. Tipping the scales. Though health risks due to smoking are decreasing with diminishing numbers of smokers, a higher percentage of obese people are increasing the well-being risks that come from the condition. Obese people face impaired mobility, a greater risk of death, and the increased chances of being placed in a nursing home.
  7. What’s killing us now? While heart disease and cancer are the two leading causes of death for elderly Americans (a trend seen over several decades), Alzheimer’s disease has moved up to fifth place from seventh in 2000. Meanwhile, the suicide rate among those 65 and older was down to 14.9 per 100,000 people in 2010 from 19.7 per 100,000 in 2000.
  8. Largely independent. Citizens ages 65-69 have an average yearly income of $37,200, but this dips to slightly less than $20,000 for those over the age of 80. Income sources include Social Security (37 percent), working (30 percent), pensions (19 percent), and investments and savings (11 percent). Retirees that are younger generate more income through employment, and older retirees generate more income through Social Security.
  9. Working late. Although 65 percent of employees retire when they hit 65 years old, those still working after that age do so on a part-time basis. Those with higher-education degrees and divorced women are more likely to be in the workforce for the longest periods of time.
  10. Kings and Queens of their castles. People ages 65 and older have the lowest poverty rate compared to other age groups. In addition, the percentage of homeowners in the same age group (81 percent) has remained even, while the percentage homeowners under age 35 have decreased from 43 percent in 2006 to approximately 37 percent today.
  11. Still together after all these years. The percentage of married people in their late 60s to early 70s has been steady at about 75 percent for five decades. The amount of widows has contracted due to more women getting divorced, as well as more men increasing their longevity. Asians that were polled were more likely to remain married as they aged, with whites, Hispanics, and blacks trailing in numbers.

As life expectancy continues to increase with greater focus on health, exercise and nutrition as well as improving technology, the Boomer generation is going to realize increased stress on their retirement savings. Those who have not saved enough may face becoming dependent upon government assistance and insurance like Social Security or may be forced to take equity from their homes.

Seniors who don’t want to compromise the retirement lifestyle they’ve always dreamed on might strongly consider alternative savings and investment products. The ideal outline of these products might combine savings protection with interest earnings and the guarantee of income that you can’t outlive.

Products like fixed indexed annuities, especially when combined with lifetime income riders, provide a compelling solution for those in or facing retirement.

Why turning Employees into Brand Ambassadors matters?

Typically, you might think of brand ambassadors as someone who promotes or buys your product/services and shows consistent support online.

That support can be through social media channels, email, review sites, and other services.

While that is a somewhat accurate view, many companies fail to realize how important turning their own employees into brand ambassadors is for their brand success.

The relationships your employees have with their networks – which likely include potential customers, prospects, and hires – are stronger than any relationship the people in their networks may have with your brand. Yet, before we dive into why getting employees to be brand ambassadors matters, let’s clearly define exactly what it means.


A brand ambassador is someone who promotes a brand and its products to their network with the objective of increasing brand awareness and driving sales.

Historically, a brand ambassador was typically a celebrity or someone with a good amount of name recognition who was paid for their efforts to promote a brand or products.

Yet, this definition is expanding and has expanded to employees of an organization. In the past, notable ambassadors for businesses mainly have been founders and executives.

However, in recent years and with the rise of social media, non-executive employees from all departments have and can become effective brand ambassadors.

There certainly has been a shift and expansion in who is considered a brand ambassador and for businesses, employees should be the top candidates.



By turning and enabling employees to become brand ambassadors, you can greatly increase marketing and social reach of your company.

During our employee advocacy guide research, we found some interesting stats:

  • Employees have an average of 1,090 social connections
  • Employees also have 5x more reach than corporate accounts

Additionally, a Nielsen study showed that 84% of people trust recommendations from friends, family, colleagues over other forms of marketing.

Now, if your company has a few hundred employees who are active brand ambassadors (sharing content, promoting job and the products, etc.), you can easily grow your company’s overall marketing and social reach exponentially.


Another interesting stat, was employees social followers are 7x more likely to convert on the content that is shared (source). This also goes back to the Nielsen study, that people trust recommendations from people they are connected.

Yet, besides giving a boost to the number of leads, the quality of those leads is also improved. Because your employees have authentic relationships with their followers, they have a more direct and trusted connection to your targeted demographic.

Your employees now become the extended lead generators for your company and because of that, the quality of those leads is greatly improved.


Another big to get your employees as brand ambassadors that is often overlooked, is the increase of social recruiting.Your company and others are always looking for top talent to bring to the team and what better way through current employees?If your employees are active brand ambassadors, consistently sharing and talking about the value of their workplace, will certainly attract new talent and candidates who are much more eager to accept a potential job offer.

Many enterprise level companies might not think they have a need for improved social recruiting because their established brand is strong enough. However, even top tier level company job pools can be improved by positive reinforcement from employee brand advocates.

Better to be overwhelmed with excited and high-level quality job candidates then struggle to find any that qualify.

Employees acting as brand

The top 6 concerns your clients are most worried about

Which of these common concerns are your clients most worried about?

  • Outliving my money
  • Flexibility/liquidity of my money
  • Maintaining my current lifestyle through retirement
  • Protecting my premium
  • Social security may not be available
  • Need for nursing home care

Download this client-approved presentation from North American Company to help start the conversation about financial needs in retirement.


Download the Client-Approved Presentation


The front of each page features valuable client-friendly information, graphics and questions to help you get the conversation going. The back of each page will help guide you through the kit with talking points and important reminders.

DOL Update


There continues to be a misperception in the industry that the DOL has already issued an 18-month delay to the fiduciary rule. While we continue to believe a delay will be issued soon, as of today, no such delay is in place and the final implementation date is still set for January 1, 2018.

Several industry groups continue to lobby both Congress and the DOL, advocating for a delay and for modifications to the rule. In addition, the court cases continue to work their way through the appellate process, and we are expecting a decision from the 5th Circuit Court of Appeals any day now.

But rather than just sit around and wait for something to happen, there are several actions that you can take today to lend your support for the delay. 

  1. Sign the petition. The Fixed Annuity Consumer Choice Campaign has an online petition that you can easily sign and submit to the DOL. You can access this petition at:  This petition was originally submitted to the DOL with over 2,600 signatures, but more signatures are needed. Please add your name to the list today.
  1. Contact Congressmen Stivers (R-OH, 15th District) or Cleaver (D-MO, 5th District). These Congressmen have agreed to reach out to Labor Secretary Acosta, urging him to issue the delay and revisit how fixed index annuities should be treated. They should be thanked for their support of fixed index annuities. For those of you who live/work in either of these districts, a personal visit to their office or a phone call is the most effective means of communication. For those of you who have clients in these districts but who personally live/work outside the district, the most effective communication would be from your clients. Your clients could send a short email to their office at the following links:
  1. Contact Senator Perdue (R-GA), and Senator Scott (R-SC). These Senators have expressed willingness to support fixed index annuities, but they need to hear from their constituents on this issue. If you or your clients live in GA or SC, please reach out to these Senators at the following links:Perdue:

    You could also submit a form letter from the following site to either of these Senators, but only if you live in GA or SC:

  1. Contact your Congressional Representative and Senators. A simple email to your Representative and Senators is always a good idea, even if they are opposed to the position you are advocating. A simple message stating how you always act in the best interest of your clients in helping them plan for retirement, that fixed index annuities are an important piece of a sound retirement strategy, and that the current DOL Fiduciary Rule creates an undue burden on the use of fixed index annuities as part of an overall retirement strategy. And be sure to ask them to support a delay of the Fiduciary Rule as proposed by the DOL. You can easily find your Representative or Senators at the following site:

It is also important to reiterate that the impartial conduct standards (best interest of client, reasonable compensation, no materially misleading statements, disclosure) that took effect on June 9th continue to be in place and will most likely remain in place even if a delay is formally issued. You should continue to operate under these impartial conduct standards—this is our industry’s new “normal.”

As always, we will continue to provide updates as things change.  In the meantime, please don’t hesitate to reach out to Tim Nelson ( or Bob Seawright ( directly with specific questions on this important topic. Your Business Consultant is also an excellent resource to help you navigate the changes occurring in our industry.

Jennifer Schendel

President & CEO