TCM72 Posted August 8, 2017 Share Posted August 8, 2017 In determining whether someone under the new fiduciary regulation is providing educational assistance to a plan participant or giving actual advice, when the investment professional is actually assisting that participant with completing a risk tolerance profile questionnaire/assessment-would that constitute advice since they are discussing the individual's personal situation...or NOT because it is the participant actually providing the answers and the investment professional is just there in case they had a question about how to complete the form? Where is this line. I've read a lot of articles, but it seems this is a pretty thin line...When do they become a 3(21) fiduciary or get to remain under a suitability standard? Link to comment Share on other sites More sharing options...
My 2 cents Posted August 8, 2017 Share Posted August 8, 2017 My guess is that when the investment professional starts pointing the participant towards specific investments based on the risk tolerance profile, it moves from education to giving actual advice. RatherBeGolfing 1 Always check with your actuary first! Link to comment Share on other sites More sharing options...
TCM72 Posted August 15, 2017 Author Share Posted August 15, 2017 What if they are simply helping them answer what is in an "educational" enrollment kit to determine what model to be in? The participant answers the questions, but the investment professional is sitting there with them assisting them in going through the questions. The questions then gives them a score to derive what model they then select? Would this be education or advice? Link to comment Share on other sites More sharing options...
My 2 cents Posted August 15, 2017 Share Posted August 15, 2017 Presuming that no specific investments are built into the models from which the participant is choosing, I would think that it is still education. If, however, the model matching their answers consists of specific stocks, bonds, or funds, then it might have moved over to investment advice. I think the idea might be that if you stick to saying what kinds of investments would meet the the risk tolerance and goals without suggesting specific investments, it ought not to be considered fiduciary in nature. I think the whole idea behind the distinction is that the investment professional should not be in a position where they can steer the participant into one investment rather than another based on how lucrative the investment is from the investment professional's point of view, since that makes it too easy for their to be a conflict of interest. Always check with your actuary first! Link to comment Share on other sites More sharing options...
TCM72 Posted October 4, 2017 Author Share Posted October 4, 2017 Thank you for your feedback! Hadn't been on in a little while... Link to comment Share on other sites More sharing options...
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