First Phase of DOL Fiduciary Rule to Go Into Effect Tonight

The initial implementation of the Department of Labor’s fiduciary rule goes into effect at 11:59 PM tonight. After that time, any recommendations made to clients regarding rolling over or investing funds from a 401(k), pension plan, IRA, or similar account will be subject to fiduciary obligations and must comply with the rule’s “impartial conduct standards.”
 
When Labor Secretary Alexander Acosta said he would not delay the initial implementation of the rule beyond today, NAIFA developed a checklist of things that advisors should have in place by this deadline:
  • Pay attention to what your broker-dealer or financial institution is telling you.
  • Know which clients and what kinds of sales and marketing are impacted by the rule.
  • Understand what disclosures and communications have to happen with your clients and when.
  • Be clear about your compensation with clients, and ensure they understand their choices.
  • Keep clear records documenting why your recommendations are made.
  • Educate your staff - they need to know what you know and under what circumstances all of the regulations will apply.
The rule’s more onerous requirements are scheduled to go into effect in January. NAIFA is encouraged that a DOL official has stated that the portions of the rule that go into effect in January 2018 could get pushed further back. We believe that the department exceeded its authority with the current rule, but if the rule is to remain in force we wish to seek its improvement.  NAIFA continues to work with new and career staff members at DOL and also with Congress to make the rule more workable for advisors and less disruptive for investors.
 
  • Posted June 9, 2017 IN


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