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Trends from the 2012 Fiduciary Survey of Investment Advisors and Registered Representatives

"The survey not only sought advisors' opinions on the fiduciary standard but also gauged their understanding of what such a standard means now, or would mean, to their businesses. Key findings in the first report on the survey pointed out that registered reps and investment advisors in the field believe that extending the fiduciary standard would not cost investors more for advice, limit access to advice or products nor price investors out of the market for advice."

Investment Representative Who Did Not Exercise Authority Over Failed Plan Investment Was Not ERISA Fiduciary

"A registered investment advisor representative who recommended the investment of plan assets in a risky start-up venture that eventually failed was not subject to suit as a fiduciary under ERISA, according to [the U.S. Court of Appeals for the Fifth Circuit]. The registered representative did not actually exercise discretionary authority with respect to the transaction at issue, the court stressed." [Tiblier v. Dlabal, No. 13-50344, (5th Cir. Feb. 28, 2014)]

Conflicts in a Rapidly Changing Fiduciary Landscape: Dually Registered or 'Hybrid Advisor' Challenges (PDF)

12 pages. "For non-discretionary advice relationships, the DOL proposal would condition the availability to receive 12b-1 fees and other forms of revenue sharing upon satisfaction of the terms of a new 'best interest contract' or 'BIC' exemption. The conditions of the BIC exemption are numerous, highly technical and require the delivery of a 'best interest' promise to clients which exposes the firm and its representatives to litigation risk. In the case of discretionary advice relationships ... the receipt of 12b-1 fees, revenue sharing payments marketing fees, administrative fees, sub-TA fees and sub-accounting fees by hybrid firms with discretionary management authority over client IRA assets would be explicitly disallowed."

District Court Says No to IRS About Registered Tax Return Preparers -- Are ERPAs, Enrolled Actuaries or EAs Next?

"If, as the Court says, filing a tax return was not included in the statutory framework of Circular 230 practice before the IRS, and if practice before the IRS only includes representing taxpayers who are involved in a dispute with the IRS, such as an appeal, then filing a determination letter application or an EPCRS VCP Application with IRS Employee Plans would also not be included."

Text of IRS Instructions for Form 2848: Power of Attorney and Declaration of Representative (PDF)

Revised Dec. 2015. "What's New: ... Updated the description and representation requirements for unenrolled return preparers (designation h). Removed registered tax return preparer (designation i). The unenrolled return preparer designation includes individuals who passed the IRS registered tax return preparer competency test that was offered between November 2011 and January 2013."

Text of Draft IRS Instructions for Form 2848: Power of Attorney and Declaration of Representative (PDF)

Draft is dated August 6, 2015 but indicates a December 2015 revision date. "What's New: Updated the description and representation requirements for unenrolled return preparers (designation h). Removed registered tax return preparer (designation i). The unenrolled return preparer designation includes individuals who passed the IRS registered tax return preparer competency test that was offered between November 2011 and January 2013."

Goldman Case Boosts Odds for Broker Fiduciary Standard in Senate Bill

Excerpt: [The April 27, 2010] Senate hearing with Goldman Sachs may increase the likelihood that a fiduciary standard for brokers will make it into Senator Christopher Dodd's financial regulatory reform legislation.

New Rules for 401(k) Advice

"Lax standards among financial advisers who manage 401(k)s and IRAs are in the crosshairs of the White House, which has proposed rules that require advisors to either use independent computer models that spit out advice, or else avoid steering workers into funds to which they are tied or that pay them a fee based on their recommendation."

NAIFA Comment Letter to SEC on Duties of Brokers, Dealers and Investment Advisers (PDF)

19 pages. Excerpt: "As both licensed insurance producers and broker-dealer registered representatives, [National Association of Insurance and Financial Advisors (NAIFA)] members are currently subject to a comprehensive regulatory regime consisting of state insurance laws, state and federal securities laws, self-regulatory organization rules and the compliance policies and procedures of their broker-dealers... As a result of these multiple regulatory layers, NAIFA members are among the most comprehensively regulated individuals in the financial services industry.... The imposition of a uniform fiduciary standard could result in registered representatives having to significantly increase the time and resour ces they devote to regulatory compliance, which would, in turn, lead to increased costs for the registered representatives and increased prices for their clients. The likely result would be a decrease in services and advice for less well-off clients, who are less able to afford higher prices for service and assistance."

The Impact of The Broker-Dealer Fiduciary Standard on Financial Advice

"It has been suggested that the imposition of a fiduciary standard on registered representatives would result in significant changes in how broker-dealers conduct business by limiting a representative's ability to recommend commission investments, provide advice to middle-market clients, and offer a broad range of financial products. We take advantage of differences in state broker-dealer common law standards of care to test whether a relatively stricter fiduciary standard of care impacts the ability to provide services to consumers. We find that the number of registered representatives doing business within a state as a percentage of total households does not vary significantly among states with stricter fiduciary standards."