
By Oyster Consulting LLC
Subscribe to our original industry insightsThe new Department of Labor (“DOL”) Rule changes the definition of “fiduciary” under the Employee Retirement Income Security Act (“ERISA”), expanding the universe of financial professionals who would be deemed to be fiduciaries.
Most of the Rule’s requirements become effective April 10, 2017. The full disclosure provisions, the policies and procedures requirements, and the contract requirement do not go into full effect until January 1, 2018.
While RIAs who do significant business in the 401(k) market have experience in complying with ERISA and DOL requirements, the vast majority of RIAs – who may advise only on IRAs for individuals – could find themselves scrambling to comply with new reporting and regulatory requirements.
Carefully review business practices and procedures in key areas such as education, rollovers, and referrals. If you provide educational retirement classes, lunches, or seminars, review your materials to ensure they fall within the education exemption. Your materials should consist of general information about the mix of assets an investor should have based on age, income, and other circumstances. Your materials should avoid suggesting specific stocks, bonds, or funds – otherwise this could constitute advice subject to a fiduciary duty.
Given the anticipated complexity of the rule, firms should engage legal, tax, and compliance experts to help them fully understand its implications and ensure their plans comply with the new regulations.
Your clients may have no idea that this is coming or what it means. They should hear about it from you. You should be talking to clients now about the DOL fiduciary rule.
Oyster Consulting understands that every firm is unique. Our experts have years of industry experience, and can quickly assess through thoughtful and skillful questions what areas of your firm are ready to comply with the new regulations, and those that may need improvement. Oyster will not only provide you firm with a written report of problem areas, but will also identify best practices.
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