The stay of the new DOL fiduciary rule will remain in effect until the lawsuits challenging the rule are decided and appeals are resolved. This litigation process is likely to take several years. In the meantime, the fiduciary status of advisors and agents will be measured under the current regulation’s five-part test. However, in some cases the application of that test could result, as this article explains, in apparent one-time recommendations being deemed to satisfy the five-part test. As a result, advisors, agents and their firms should carefully consider where fiduciary status for retirement accounts may apply and, in those cases, should consider complying with the conditions of an applicable prohibited transaction exemption.
To view the full alert, visit the Faegre Drinker website.
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About Author: Fred Reish
Fred Reish is a noted authority on retirement plan products and plan management who helps ensure that clients fulfill their fiduciary duty to investors and comply with federal law. He counsels plan sponsors, service providers and registered investment advisers on fiduciary responsibility, prohibited transactions under federal law, federal audits and pension plan disputes. When clients face regulatory disputes, Fred counsels them on mitigating the impact of enforcement actions and resolving compliance issues. View all posts by Fred Reish, Joan Neri and Joshua Waldbeser
About Author: Joan Neri
Joan Neri provides counsel to employer plan sponsors and plan service providers in fulfilling their obligations under the Employee Retirement Income Security Act (ERISA) and complying with the Internal Revenue Code rules governing employee benefit plans. Joan advises on ERISA fiduciary status and responsibilities, avoidance of prohibited transactions, the considerations associated with structuring, developing and offering investment products and services to ERISA plans, and day-to-day plan operational and compliance issues. View all posts by Fred Reish, Joan Neri and Joshua Waldbeser
About Author: Joshua Waldbeser
Joshua Waldbeser counsels retirement plan sponsors, asset managers and funds, and financial services providers on their fiduciary responsibilities under ERISA, and keeps them on course with regulatory compliance matters. Formerly with the Department of Labor (DOL) Employee Benefits Security Administration, Joshua has an insider’s view of the regulatory challenges faced by employers with respect to their own plans, and by insurance companies, investment advisers, broker-dealers, recordkeepers, banks and trust companies with respect to their services to plans and IRAs. He provides practical, business-oriented advice that reflects the interplay between ERISA, securities and other sources of law, and focuses on compliance and risk mitigation. View all posts by Fred Reish, Joan Neri and Joshua Waldbeser
