The impact of the fiduciary rule continues, and OneAmerica is the latest company to make adjustments to better comply with the regulation in a manner that minimizes operational disruption.
“As the retirement and financial industry shifts to comply with the ever-evolving world of fiduciary regulation, OneAmerica today announced the debut of revenue accounts to help ease the burden on both customers and financial advisors,” the Indianapolis-based company said Tuesday.
It’s just the latest in a number of initiatives the company has undertaken in an effort to increase transparency around compensation and conflicts of interest.
OneAmerica revenue accounts offer a shift from commission-based payments to fee-based payments for advisors. Created at the retirement plan level, revenue accounts can be used to pay an advisor’s fee – without requiring deductions from participants’ accounts.
“We recognize the changing environment and the challenges it can bring our customers and advisors,” Pat Foley, OneAmerica president of Individual Insurance and Retirement Services, said in a statement. “At OneAmerica, we continue to ask how we can best serve those who depend on us, and we are committed to finding innovative solutions.”
The company says there is no plan minimum, and any plan size or type can use a revenue account.
“This is a new and welcomed option for group annuity investments, because it makes retirement preparation easier for advisors and sponsors,” Terry Burns, assistant vice president of Products and Investments for OneAmerica Retirement Services, noted. “We believe revenue accounts will help our distribution partners by providing a fee-based compensation versus a commission for the great work they do, particularly on behalf of the small and mid-size plan market, where plan sponsors often need help in their efforts to ensure their participants can retire comfortably.”
A revenue account with OneAmerica will not require any changes to an existing plan’s pricing or disturbance in the advisor’s payment schedule, he added in a call with 401kSpecialist.
The way a commission is calculated is preserved, and commission amounts are credited to the plan’s revenue account then withdrawn that day and paid to the advisor as a fee.
“In response to advisor demand, OneAmerica previously expanded its group annuity platform to include zero revenue sharing funds, in which participants pay only the investment management expense,” the company concluded. “That initiative has been welcomed by the industry, which seeks increased fee transparency.”