All posts by Fred Reish

The New Fiduciary Rule (14): The Timeline for the Final Regulation and Exemptions


2020-02, fiduciary
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The U.S. Department of Labor has released its package of proposed changes to the regulation defining fiduciary advice and to the exemptions for conflicts and compensation for investment recommendations to retirement plans, participants (including rollovers), and IRAs.

Key Takeaways

  • The Department of Labor’s proposed fiduciary “package” expands the scope of fiduciary status (to include, e.g., one-time recommendations) and the types of transactions that are covered by fiduciary advice.
  • That is particularly important since, where the fiduciary recommendation involves a conflict of interest (e.g., a new fee or a commission), the firms and their representatives and agents will need to satisfy the conditions of either PTE 84-24 or PTE 2020-02.
  • The comment period for the proposed regulation and exemptions is over. The DOL now starts the process for finalizing the guidance and determining the effective date.

The DOL published its proposed fiduciary regulation and prohibited transaction exemptions in the Federal Register on November 3, 2023. That was the beginning of a process that will end with the final rules and their effective and applicability dates.

The “effective” date is the day on which the guidance becomes final as a regulation or exemption. The “applicability” date is the day on which the new rules must be complied with. The proposals said that the effective date and the applicability date would be the same. However, that may not be the case with the final rules.

This article is my best guess about the timing of the process to complete the DOL’s work.

Continue reading The New Fiduciary Rule (14): The Timeline for the Final Regulation and Exemptions →

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ERISA Moments Ep. 13: Rollover Recommendations Will be Fiduciary Advice…And What About Withdrawals?


ERISA

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments.

See the newest episode, Rollover Recommendations Will be Fiduciary Advice…And What About Withdrawals?, on the Spotlight on Benefits blog.

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The New Fiduciary Rule (13): Advisors and Agents with Restricted Investment Menus (Part 2)


2020-02, fiduciary
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The U.S. Department of Labor has released its package of proposed changes to the regulation defining fiduciary advice and to the exemptions for conflicts and compensation for investment recommendations to retirement plans, participants (including rollovers), and IRAs.

Key Takeaways

  • The Department of Labor’s proposed fiduciary “package” expands the scope of fiduciary status (to include, e.g., one-time recommendations) and the types of transactions that are covered by fiduciary advice.
  • That is particularly important since, where the fiduciary recommendation involves a conflict of interest (e.g., a new fee or a commission), the firms and their representatives and agents will need to satisfy the conditions of either PTE 84-24 or PTE 2020-02.
  • One question that arises under the best interest standard in the PTEs is whether advisors or insurance agents can make recommendations from limited, or restricted, menus of available products.

This article continues a discussion of the consequences of limited menus on the availability of the exemptions and the relief they provide for compensation resulting from the recommended transactions.

Continue reading The New Fiduciary Rule (13): Advisors and Agents with Restricted Investment Menus (Part 2) →

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The Proposed DOL Fiduciary Rule


2020-02, fiduciary

The Department of Labor’s (DOL’s) recently issued proposed rule would expand the definition of fiduciary advice to cover many services provided by advisers to retirement plans and IRAs.  Under this expanded definition, advisers may need the relief provided by Prohibited Transaction Exemption (PTE) 2020-02 to avoid a prohibited transaction.  The DOL has also proposed amendments to PTE 2020-02.

This article, co-written by Joan Neri, describes the proposed fiduciary advice rule and the proposed amendments to PTE 2020-02 and discusses the impact these proposals, if finalized, will have on advisers.

Continue reading The Proposed DOL Fiduciary Rule →

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The New Fiduciary Rule (12): Advisors and Agents with Restricted Investment Menus (Part 1)


2020-02, best interest, DOL, fiduciary, prohibited transaction
, , , , ,

The U.S. Department of Labor has released its package of proposed changes to the regulation defining fiduciary advice and to the exemptions for conflicts and compensation for investment recommendations to retirement plans, participants (including rollovers), and IRAs.

Key Takeaways

  • The Department of Labor’s proposed fiduciary “package” expands the scope of fiduciary status (to include, e.g., one-time recommendations) and the types of transactions that are covered by fiduciary advice.
  • That is particularly important since, where the fiduciary recommendation involves a conflict of interest (e.g., a new fee or a commission), the firms and their representatives and agents will need to satisfy the conditions of either PTE 84-24 or PTE 2020-02.
  • One question that arises under the best interest standard in the PTEs is whether an adviser or agent can make recommendations from limited, or restricted, menus of available products.

This article focuses on PTE 2020-02 and the relief it provides to broker-dealers, investment advisers, banks and trust companies, and insurance companies that sell through employees and statutory employees.

Continue reading The New Fiduciary Rule (12): Advisors and Agents with Restricted Investment Menus (Part 1) →

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ERISA Moments Ep. 11: Rollovers: What PTE 2020-02 and PTE 84-24 Would Require for Rollover Recommendations


ERISA

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments.

Watch the newest episode, Rollovers: What PTE 2020-02 and PTE 84-24 Would Require for Rollover Recommendations, on the Spotlight on Benefits blog.

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The New Fiduciary Rule (11): What is An Investment? (Part 3)


DOL, fiduciary, IRA, prohibited transaction, rollovers
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The U.S. Department of Labor has released its package of proposed changes to the regulation defining nondiscretionary fiduciary advice and to the exemptions for conflicts and compensation for investment recommendations to retirement plans, participants (including rollovers), and IRAs.

The proposed regulation redefines fiduciary status for “investment” recommendations. But what is an investment recommendation? The answer: More than you think.

Key Takeaways

  • The Department of Labor’s proposed fiduciary “package” includes new definitions of nondiscretionary fiduciary investment advice.
  • Of course, the application of the definition is based on a recommendation about investments and other property. The proposed regulation has an expansive definition of such a recommendation.
  • Broker-dealers, investment advisers, and insurance companies, and their representatives, need to understand the range of recommendations that are covered by the fiduciary standards.
  • That is particularly true (i) since one-time recommendations can result in fiduciary status and (ii) where the fiduciary investment recommendation involves a conflict of interest (e.g., a new fee or a commission), the firms and their representatives and agents will need to satisfy the conditions of either PTE 84-24 or PTE 2020-02.

This article continues a discussion of the definitions of investment and other property transactions that, if recommended to a retirement investor (that is, a private sector qualified plan, participants in those plans, or IRA owners), will require satisfaction of the fiduciary standards and, in most cases, of the conditions of a prohibited transaction exemption.

Continue reading The New Fiduciary Rule (11): What is An Investment? (Part 3) →

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