This is my eleventh article about interesting observations “hidden” in the fiduciary regulation and the exemptions. ERISA and the Internal Revenue Code limit compensation for services to plans and IRAs to “reasonable” amounts. Prohibited Transaction Exemption (PTE) 84-24 and the Best Interest Contact Exemption (BICE) also limit compensation to reasonable
This is my tenth article about interesting observations “hidden” in the fiduciary regulation and the exemptions. When the new fiduciary advice regulation is applicable on April 10, 2017, a recommendation to a participant to take a distribution and rollover to an IRA will be a fiduciary act. It doesn’t matter
This is my ninth article about interesting observations “hidden” in the fiduciary regulation and the exemptions. As I explained in an earlier post, there are three parts to the best interest standard . . . Prudence: “. . . the fiduciary acts with the care, skill, prudence, and diligence under
This is my eighth article about interesting observations “hidden” in the fiduciary regulation and the exemptions. The final regulation on fiduciary advice continues, as education, the current practice of providing participants with asset allocation models that are populated with a plan’s designated investment alternatives (DIAs). However, the rule imposes a
This is my seventh article about interesting observations “hidden” in the fiduciary regulation and the exemptions. There are three parts to the best interest standard . . . The prudent person rule. Individualization to the retirement investor’s circumstances. The duty of loyalty. See the three parts below. Interestingly, none of
This is my sixth article about interesting observations “hidden” in the preambles to the fiduciary regulation and the exemptions. In some cases, the concerns about the scope of the fiduciary rule are overblown. For example, there have been some statements that advice about minimum required distributions for IRAs would be
This is my fifth article about interesting observations “hidden” in the preambles to the fiduciary regulation and the exemptions. The Best Interest Contract Exemption (BICE) has a special exemption for “level fee fiduciaries” who recommend to plan participants that they take distributions and rollover to an IRA advised by the
This is my fourth article about interesting observations “hidden” in the preambles to the fiduciary regulation and the exemptions. During a recent webinar for TD Ameritrade, one of the attendees asked if Jim Cramer’s TV stock tips would be considered fiduciary advice. I said that they would not be, since
This is my third article about the interesting observations “hidden” in the preambles to the fiduciary regulation and the exemptions. Under the Best Interest Contract Exemption (BICE), the “financial institution” (e.g., a broker-dealer) cannot pay a fiduciary adviser (e.g., a financial adviser) incentive compensation that would encourage an adviser to
This is my second article about the interesting observations “hidden” in the preambles to the fiduciary regulation and the exemptions. The recommendation of investments and insurance products to plans, participants, and IRAs will be subject to the best interest standard of care. (The best interest standard is a combination of
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