BNY Mellon's Pershing Launches Two-Part Series on Fiduciary Practices and Conflicts of Interest for Broker-Dealers and Hybrid Firms

March 1, 2016

JERSEY CITY, N.J., March 1, 2016 — Pershing LLC, a BNY Mellon company, today announced the release of a two-part series on fiduciary and compensation compliance challenges. Pershing's new series, Conflicts in a Rapidly Changing Fiduciary Landscape, developed in collaboration with Groom Law Group, is intended to help broker-dealers and hybrid firms identify and address potential conflicts of interest in their business models.

"Rules governing acceptable compensation practices are fast-evolving," said Rob Cirrotti, managing director and head of investment and retirement solutions at Pershing. "In this environment, firms that aren't prepared to address these dramatic changes will be at a disadvantage. The reality is that new regulation, such as the Department of Labor's proposed Conflict of Interest rule, has implications for all business models—and everyone needs to begin proper planning and compliance oversight."

The two-part series addresses the unique challenges for broker-dealers and hybrid firms and reviews the current compensation practices that may create conflicts of interest for each business model respectively. The series also discusses potential compliance practices each type of firm can put in place to identify and address potential conflicts between the standards of care and the manner in which the firm or its representatives are compensated.

The series will be rolled-out as follows:

    • Part One – A Focus on Broker-Dealer Challenges discusses broker-dealer practices that may create potential conflicts including 12b-1 fees received as compensation for sales resulting from recommendations of mutual funds to clients, revenue sharing payments, transaction fee and no-transaction-fee (NTF) funds, and recommendations on IRAs as well as ERISA plans.
    • Part Two – A Focus on Dually Registered or "Hybrid" Challenges looks at the unique compensation-related conflicts that hybrid firms face. Hybrid firms will need to carefully evaluate revenue streams that might be available as a broker-dealer, such as 12b-1 fees based on the investment advice they provide as an RIA. The whitepaper points out the ways dually registered financial professionals will face increased scrutiny with their investment recommendations.

To obtain a copy of Conflicts in a Rapidly Changing Fiduciary Landscape please visit www.pershing.com/DOL.

About BNY Mellon's Pershing

BNY Mellon’s Pershing and its affiliates provide advisors, broker-dealers, family offices, hedge fund and ’40 Act fund managers, registered investment advisor firms and wealth managers with a broad suite of global financial business solutions. Many of the world’s most sophisticated and successful financial services firms rely on Pershing for clearing and custody, investment and retirement solutions, technology, enterprise data management, trading services, prime brokerage and business consulting. Pershing helps clients improve profitability and drive growth, create capacity and efficiency, attract and retain talent, and manage risk and regulation. With a network of 23 offices worldwide, Pershing provides business-to-business solutions to clients representing more than 6 million investor accounts globally. Pershing LLC (member FINRA, NYSE, SIPC) is a BNY Mellon company. Additional information is available on pershing.com, or follow us on Twitter @Pershing.

About BNY Mellon

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of March 31, 2017, BNY Mellon had $30.6 trillion in assets under custody and/or administration, and $1.7 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.