The Fiduciary Rule’s BICE: An Uphill Battle

Jan 03, 2017

Under the Best Interest Contract Exemption (BICE), documentation and proof of compliance is critical, but will require major overhauls from operations all the way to distribution

Alma Piscitello, head of strategic relationships at Northern Lights Distributors was recently quoted in the Fund Operations article, “The Fiduciary Rule’s BICE: An Uphill Battle.

“When we discuss communications, the client engagement piece is really important because teams now need to know how to implement and create a workflow process for every single client engagement touch point,” said Alma Piscitello, head of strategic relationships at Northern Lights Distributors. “There are specific communication impacts to clients in how you engage with them, the amount of information you must disclose and the documentation to follow. The rationale behind [fiduciary] advice must be explained, the advice must be documented, [conflicts of interest] must be disclosed and then the client has to attest to all of this.”

For mutual fund advisers that choose not to convert to a fee-based business and instead choose commission-based accounts, they must execute BICE, which would mean the process Piscitello outlined must happen every time there is communication with a client.

“So BICE impacts the communication with clients, as well as the communication needed internally with operations or marketing, as well as with the sales arm or sales organization,” Piscitello added.

To read more about the fiduciary rule’s BICE, click here.

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