This week, the Department of Labor announced an official delay of the effective date for key provisions of its Fiduciary Rule. During the extended, special transition period, the Department of Labor has indicated it will decide whether to propose additional changes. Previously slated to become effective in January, the Best Interest Contract Exemption and Principal Transactions Exemption, along with the applicability of certain amendments to Prohibited Transaction Exemption 84-24, now have a compliance date of July 1, 2019.
However, aspects of the rule that became effective on June 9, 2017 will remain in effect. Notably, more activities are now considered fiduciary in nature under the expanded definition of investment advice under the rule; and fiduciary advisers must adhere to the impartial conduct standards (also referred to as the best-interest standard), which includes:
- giving prudent advice that is in the retirement investor’s best interest;
- not recommending transactions that are anticipated to result in more than reasonable compensation; and
- not making misleading statements to the retirement Investor about recommended transactions.
The temporary enforcement policy contained in Field Assistance Bulletin 2107-02 has also been extended to cover the 18-month delay, but Labor Secretary Alexander Acosta has made it clear that he stands ready to take action against willful violations of those components of the rule currently in effect.
To help you better understand your specific responsibilities under the DOL Fiduciary Rule as it currently stands, we recommend seeking ERISA assistance from a qualified ERISA service provider.
About RIA Compliance Group: RIA Compliance Group is an investment adviser compliance consulting firm based in Delray Beach, Florida. The firm’s mission is to provide affordable, timely, practical, and cost-effective compliance advice. We help investment advisers to comply with the myriad of state and SEC regulations and compliance obligations facing their firms. RIA Compliance Group takes pride in giving personal service and real world compliance advice, not theoretical concepts and legalese. The firm interacts on a daily basis with SEC and state securities regulators.
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