Discretionary Management of IRAs: Conflicts and Prohibited Transactions
Key Takeaways Where an investment adviser charges different fees for managing fixed income in a portfolio than for managing equities, and has discretion to determine the allocation between the two in an IRA, the investment adviser has control over its fees, which appears to violate a prohibited transaction provision in the Internal Revenue Code. The […]
Best Interest Standard of Care for Advisors #99: The PTE 2020-02 Requirement for An Annual Retrospective Review
Key Takeaways The DOL’s expanded definition of fiduciary advice is explained in the preamble to PTE 2020-02. When conflicted fiduciary advice is given to retirement investors (that is, retirement plans, participants (including rollovers), and IRA owners (including transfers of IRAs), it results in prohibited transactions under the Internal Revenue Code and ERISA. The PTE provides […]
Best Interest Standard of Care for Advisors #97: The SEC Requirements for Rollover Recommendations
Key Takeaways The DOL’s expanded definition of fiduciary advice is described in the preamble to PTE 2020-02. When conflicted fiduciary advice is given to retirement investors (that is, retirement plans, participants (including rollovers), and IRA owners), it results in prohibited transactions under the Internal Revenue Code and ERISA. But the PTE provides relief for conflicted […]
Best Interest Standard of Care for Advisors #94: Maintenance of Documentation for Compliance with PTE 2020-02
Key Takeaways The DOL’s expanded definition of fiduciary advice is described in the preamble to PTE 2020-02. When conflicted fiduciary advice is given to retirement investors (that is, retirement plans, participants (including rollovers), and IRA owners), it results in prohibited transactions under the Internal Revenue Code and ERISA. But the PTE then provides relief for […]
Best Interest Standard of Care for Advisors #93: Correction of Failures to Satisfy PTE 2020-02
Key Takeaways The DOL’s expanded definition of fiduciary advice is described in the preamble to PTE 2020-02. When conflicted fiduciary advice is given to retirement investors (that is, retirement plans, participants (including rollovers), and IRA owners), it results in prohibited transactions under the Internal Revenue Code and ERISA. But the PTE then provides relief for […]
Best Interest Standard of Care for Advisors #92: Consideration of Costs in the Evaluation of Rollovers
Key Takeaways The DOL’s expanded definition of fiduciary advice is described in the preamble to PTE 2020-02. The PTE then provides relief for conflicted non-discretionary recommendations (for example, rollover recommendations), if its conditions are satisfied. In both its Regulation Best Interest (Reg BI) for broker-dealers and Interpretation Regarding Standard of Conduct for Investment Advisers (Investment […]
Best Interest Standard of Care for Advisors #91: Rollover Recommendations to Participants in Government Plans
Key Takeaways The DOL’s expanded definition of fiduciary advice is described in the preamble to PTE 2020-02. The PTE then provides relief for conflicted non-discretionary recommendations (for example, rollover recommendations), if its conditions are satisfied. However, the DOL’s guidance in the PTE does not apply to rollover recommendations to participants in government plans. Rollover recommendations […]
Best Interest Standard of Care for Advisors #88: Specific Reasons for Rollover Recommendations That Won’t Work (Part 2)
Key Takeaways The DOL has issued FAQs that generally explain PTE 2020-02 and the expanded definition of fiduciary advice, particularly for rollover recommendations. The DOL’s expanded definition of fiduciary advice was described in the preamble to PTE 2020-02. The PTE then provides relief for conflicted non-discretionary recommendations (for example, rollover recommendations), if its conditions are […]
Best Interest Standard of Care for Advisors #87: Specific Reasons for Rollover Recommendations That Won’t Work (Part 1)
Key Takeaways The DOL has issued FAQs that generally explain PTE 2020-02 and the expanded definition of fiduciary advice, particularly for rollover recommendations. The DOL’s expanded definition of fiduciary advice was described in the preamble to PTE 2020-02. The PTE then provides relief for conflicted non-discretionary recommendations (for example, rollover recommendations), if its conditions are […]
Best Interest Standard of Care for Advisors #54
The Department of Labor’s “Fiduciary Rule,” PTE 2020-02: An Overview This article is an overview of the requirements of PTE 2020-02. It discusses the expanded fiduciary definition, the conditions in the PTE, and the DOL’s non-enforcement policy in effect until December 20, 2021. Key Takeaways Broker-dealers, investment advisers, insurance companies and banks (“financial institutions) are […]