Recorded September 28, 2017
The DOL's fiduciary rule went into full effect on June 9 while related exemptions were partially effective on that date. Full implementation of the prohibited transaction exemptions is scheduled for Jan. 1, 2018. The rule expands the definition of "investment advice," resulting in several entities being deemed fiduciaries that were not previously designated as such. Under the rule, essentially any recommendation made to a plan or its participants to take a particular course of action is considered fiduciary advice.
In addition, recommendations to take a rollover from a plan and guidance on how to invest rollover assets as well as the selection of investment managers and investment account arrangements are considered fiduciary advice under the new rule.
There are several exclusions from the fiduciary definition outlined in the rule. If a provider satisfies the conditions of an exclusion, it will not be deemed a fiduciary, even when providing investment-related recommendations to retirement clients. The Best Interest Contract Exemption (BICE), considered the centerpiece of the DOL's rulemaking, allows fiduciary advisers to continue receiving variable compensation, subject to certain conflict of interest constraints.
Benefits counsel must understand the impact of the rule and related exemptions on retirement plan sponsors, advisers and service providers to advise their clients on compliance and implementation best practices.
Attorney Marcia Wagner will review these and other key issues:
- The effective dates of the rule’s various provisions
- Unpacking the new definition of investment advice and its exclusions
- The exemptions from the rule, including the best interest contract exemption
- Impact on plan sponsors
- Possible revisions to DOL guidance, including modifications of BICE and other exemptions, additional exemption for clean shares and coordination with the SEC on a uniform fiduciary standard
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