Insights


Interesting Angles on the DOL’s Fiduciary Rule #95

Posted on June 19, 2018, by Fred Reish in Broker-Dealers, fiduciary, RIA, SEC. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #95

Regulation Best Interest Recommendations by Broker-Dealers: Part 1

This is my 95th article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and exemptions and the SEC’s “best interest” proposals.

By now, you probably know that both the SEC’s proposed Regulation Best Interest (“Reg BI”) for broker-dealers and the Interpretation Regarding Standard of Conduct for Investment Advisers (“RIA Interpretation”) have a best interest standard of care. The Reg BI best interest standard is for broker-dealers, while the RIA Interpretation best interest standard is for investment advisers.

At first blush, that suggests that broker-dealers and RIAs will be governed in the same way. That’s not the case.

While the RIA best interest standard applies to all advice to all clients, Reg BI only applies to securities recommendations made by broker-dealers to retail customers. Those are significant differences.

Let’s take a look at that.

Using the … Read More »


Interesting Angles on the DOL’s Fiduciary Rule #94

Posted on June 11, 2018, by Fred Reish in Broker-Dealers, DOL Activity, fiduciary, FINRA, Registered Investment Advisers, RIA, SEC, Uncategorized. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #94

SEC Proposed Reg BI and Recommendations of Rollovers (Part 3)

This is my 94th article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and exemptions and the SEC’s “best interest” proposals.

Part 1 of this series discussed the provisions in the SEC’s proposed Regulation Best Interest that would impose a best interest standard of care for rollover recommendations by broker-dealers and their registered representatives. (More specifically, the standard applies if the rollover recommendation involves securities transactions—which would ordinarily be the case for participant-directed plans.) Part 2 described some of the considerations for developing a best interest recommendation process.

This article—Part 3—describes the proposed requirement to “mitigate” the conflict of interest inherent in a rollover recommendation.

Since a broker-dealer and its representative would not, in most cases, receive any compensation if a participant does not roll over, there is, to use the … Read More »


Interesting Angles on the DOL’s Fiduciary Rule #93

Posted on June 5, 2018, by Fred Reish in BICE, Broker-Dealers, DOL Activity, fiduciary, FINRA, SEC. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #93

SEC Proposed Reg BI and Recommendations of Rollovers (Part 2)

This is my 93rd article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and exemptions and the SEC’s “best interest” proposals.

In my last post, I described the similarities between the SEC proposed Regulation Best Interest (Reg BI) and the DOL’s Fiduciary Rule (and especially the Best Interest Contract Exemption [BICE]) regarding recommendations to participants to take distributions and roll over into IRAs. The similarities include a best interest standard of care and the treatment of conflicts of interest. This article discusses the requirement of the best interest standard of care in Reg BI and compares it to the standard of care in BICE (and the requirements of FINRA Regulatory Notice 13-45). My next article—Part 3—will cover the conflict of interest issues.

In its discussion of recommendations about distributions and … Read More »


Interesting Angles on the DOL’s Fiduciary Rule #92

Posted on May 30, 2018, by Fred Reish in Broker-Dealers, DOL Activity, fiduciary, FINRA, prudent, Registered Investment Advisers, RIA, SEC. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #92

SEC Proposed Reg BI and Recommendations of Rollovers (Part 1)

This is my 92nd article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and exemptions and the SEC’s “best interest” proposals.

On April 18, 2018, the SEC released three proposals for comment—Regulation Best Interest (“Reg BI”) for broker-dealers, an Interpretation about the Standard of Conduct for RIAs (“RIA Interpretation”), and a CRS—Customer/Client Relationship Summary for both broker-dealers and RIAs. That was the beginning of a lengthy process, and the outcome is uncertain. However, if these rules are finalized, the impact on the securities industry and investors will be significant.

My first reaction is that Reg BI, which imposes a best interest standard of care on broker-dealers, is strikingly similar to the DOL’s Best Interest Contract Exemption (BICE). There are major differences—for example, the SEC proposal does not create a private … Read More »


Interesting Angles on the DOL’s Fiduciary Rule #91

Posted on May 22, 2018, by Fred Reish in BICE, Broker-Dealers, DOL Activity, fiduciary, SEC. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #91

Parallels Between the SEC Regulation Best Interest and the DOL Best Interest Contract Exemption (Part 2)

This is my 91st article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and exemptions. These articles also cover the DOL’s FAQs interpreting the regulation and exemptions and related developments in the securities laws—including the SEC’s “best interest” proposals.

This article continues my discussion of the similarities between the SEC’s proposed Regulation Best Interest (Reg BI) for broker-dealers and the DOL’s Best Interest Contract Exemption (BICE).

In addition to the standard of care (best interest and loyalty), Reg BI also has enhanced protections for conflicts of interest. Interestingly, they closely parallel the DOL’s conditions in BICE. For example, Reg BI proposes to require that material conflicts of interest involving financial incentives be eliminated or, alternatively, be disclosed and mitigated. The key word is “mitigated.” … Read More »


Interesting Angles on the DOL’s Fiduciary Rule #90

Posted on May 14, 2018, by Fred Reish in BICE, Broker-Dealers, DOL Activity, fiduciary, FINRA, prudent, Registered Investment Advisers, RIA, SEC. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #90

Parallels Between the SEC Regulation Best Interest and the DOL Best Interest Contract Exemption (Part 1)

This is my 90th article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and exemptions. These articles also cover the DOL’s FAQs interpreting the regulation and exemptions and related developments in the securities laws.

The SEC’s proposed Regulation Best Interest (“Reg BI”) is remarkable in its similarities to the DOL’s vacated Best Interest Contract Exemption (“BICE”). This article describes some of those similarities. Keep in mind as you read this that Reg BI applies to securities recommendations, while BICE would have covered any investment or insurance recommendation by a fiduciary advisor.

Reg BI, if finalized, will require that broker-dealers and their representatives act in the “best interest” of “retail customers,” which includes IRA owners and participants. The DOL’s BICE also would have required that … Read More »


Interesting Angles on the DOL’s Fiduciary Rule #89

Posted on May 7, 2018, by Fred Reish in BICE, DOL Activity, fiduciary, prohibited transaction, Recordkeeper, SEC. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #89

The 5th Circuit Decision, Prohibited Transactions, and New Non-Enforcement Policies

This is my 89th article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and exemptions. These articles also cover the DOL’s FAQs interpreting the regulation and exemptions and related developments in the securities laws.

On Monday, May 7th, the Department of Labor and the Internal Revenue Service issued non-enforcement policies for prohibited transactions that resulted from the 5th Circuit Court of Appeals vacating the Fiduciary Rule. While it is well-understood that the 5th Circuit threw out the expanded definition of fiduciary advice, it is not as well known that the 5th Circuit also vacated the exemptions that were associated with the fiduciary regulation. As a result of the loss of the exemptions, including the Best Interest Contract Exemption (BICE), many advisors (including their broker-dealers and RIAs) have inadvertently engaged … Read More »


Interesting Angles on the DOL’s Fiduciary Rule #88

Posted on April 24, 2018, by Fred Reish in BICE, DOL Activity, SEC. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #88

The Fiduciary Rule: What’s Next (Part 4)?

This is my 88th article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and exemptions. These articles also cover the DOL’s FAQs interpreting the regulation and exemptions and related developments in the securities laws.

This is the fourth of my four-part series on the critical questions raised by the 5th Circuit Court of Appeals decision to “vacate,” or throw out, the Fiduciary Rule. The first article (Angles #85) discussed the general legal issues created by the 5th Circuit decision to vacate the Fiduciary Rule. Then, Angles #86 and Angles #87 described fiduciary status for advisors under the “old” 5-part test and the standard of care for fiduciary advisors. This post discusses conflicts of interest for fiduciary advisors under ERISA and the Code—and what the future may hold.

The most difficult of the … Read More »


Interesting Angles on the DOL’s Fiduciary Rule #87

Posted on April 16, 2018, by Fred Reish in BICE, DOL Activity, fiduciary, prohibited transaction, prudent, Registered Investment Advisers, RIA, SEC. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #87

The Fiduciary Rule: What’s Next (Part 3)?

This is my 87th article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and exemptions. These articles also cover the DOL’s FAQs interpreting the regulation and exemptions and related developments in the securities laws.

This is the third of my four-part series on the critical questions raised by the 5th Circuit Court of Appeals decision to “vacate,” or throw out, the Fiduciary Rule. The first article, Angles #85, discusses the three critical questions for the SEC and DOL to answer. The second article, Angles #86, discussed the first critical question, “Who is a fiduciary?”

This post covers the second critical question, “What is the fiduciary standard of care?”

For purposes of advice to retirement plans and participants, that’s an easy answer. It’s ERISA’s prudent man rule and duty of loyalty. That standard is … Read More »


Interesting Angles on the DOL’s Fiduciary Rule #86

Posted on April 11, 2018, by Fred Reish in DOL Activity, fiduciary, prudent. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #86

The Fiduciary Rule: What’s Next (Part 2)?

This is my 86th article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and exemptions. These articles also cover the DOL’s FAQs interpreting the regulation and exemptions and related developments in the securities laws.

This is the second of my four-part series on the critical questions raised by the 5th Circuit Court of Appeals decision to “vacate,” or throw out, the Fiduciary Rule. My last post, Angles #85, introduced the questions:

Who is a fiduciary?
What is the fiduciary standard of care?
How will conflicts of interest be treated under the new rules?

This post discusses the first question: “Who is a fiduciary?”

Assuming that the 5th Circuit Court of Appeals decision is the final word, the old 5-part fiduciary test will automatically be reinstated. That means that, in order for an advisor to be a … Read More »






Recent Insights

Interesting Angles on the DOL’s Fiduciary Rule #95

Regulation Best Interest Recommendations by Broker-Dealers: Part 1

This is my 95th article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and...

Interesting Angles on the DOL’s Fiduciary Rule #94

SEC Proposed Reg BI and Recommendations of Rollovers (Part 3)

This is my 94th article about interesting observations concerning the Department of Labor’s (DOL) fiduciary...

Interesting Angles on the DOL’s Fiduciary Rule #93

SEC Proposed Reg BI and Recommendations of Rollovers (Part 2)

This is my 93rd article about interesting observations concerning the Department of Labor’s (DOL) fiduciary...