Reasonable Compensation Versus Neutral Factors This is my twenty-fifth article covering interesting observations about the fiduciary rule and exemptions. In my last post, I wrote about the Best Interest Contract Exemption (BICE) and the requirements for “neutral factors” and “differential compensation” between “reasonably designed investment categories.” As I pointed out,
The Meaning of Differential Compensation Based on Neutral Factors This is my twenty-fourth article covering interesting observations about the fiduciary rule and exemptions. The DOL’s fiduciary “package” consists of a regulation that expands the definition of advice and exemptions, or exceptions, from the prohibited transaction (PT) rules. If a recommendation
This is my twenty-third article about interesting observations concerning the fiduciary rule and exemptions. When the definition of fiduciary advice is expanded on April 10, 2017, the investment and insurance recommendations of a much larger group of advisers will be classified as fiduciary advice and will, as a result, increase
This is my twenty-second article about interesting observations concerning the fiduciary rule and exemptions. While the application of the new fiduciary rule and prohibited transaction exemptions to broker dealers and investment advisers is fairly obvious — if not fully understood, there has been little in the way of discussion about
This is my twenty-first article covering interesting observations about the fiduciary rule and exemptions. While most of the requirements in the new fiduciary rule and exemptions are “old news” for retirement plan advisers, they may require significant changes for advisers to IRAs. For example, ERISA’s prudent man rule and the
As I discussed in an earlier post (Angles #7), the Best Interest Standard of Care has three parts: The prudent man rule; a requirement for individualization; and a duty of loyalty. Notice that none of the three parts requires that the “best” investment be recommended Because of concerns that the
This is my nineteenth article about interesting observations about the fiduciary regulation and the exemptions. In an earlier post (Angles #16), I described how advisers could use the “hire me” approach to explain their services and fees without becoming a fiduciary for that purpose. Generally stated, under that approach, an
As advisers who work with ERISA-governed retirement plans already know, an adviser’s compensation cannot be more than a reasonable amount. Because of the new fiduciary advice regulation, and the associated prohibited transaction exemptions (84-24 and the Best Interest Contract Exemption (BICE)), that requirement is being imposed on investment and insurance
Much attention has been given to the new fiduciary rules (applicable April 10, 2017) for recommending distributions from retirement plans and rollovers to IRAs. Where the adviser making the recommendation is a “Level Fee Fiduciary,” the new requirements are sometimes referred to as “BICE-lite,” because only certain of the requirements
This is my sixteenth article about interesting observations “hidden” in the fiduciary regulation and the exemptions. Beginning April 10, 2017, the recommendation of almost any investment or insurance product to a plan, a participant or an IRA owner will be a fiduciary act. (While individualized recommendations are already fiduciary acts,
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