The Department of Labor’s “Fiduciary Rule,” PTE 2020-02: The FAQs
This series focuses on the DOL’s new fiduciary “rule”, which was effective on February 16. This, and the next several, articles look at the Frequently Asked Questions (FAQs) issued by the DOL to explain the fiduciary definition and the exemption for conflicts of interest.
Key Takeaways
- The new fiduciary “rule” has two parts with their own effective dates.
- The first part-the expanded definition of fiduciary advice-became effective for enforcement purposes on February 16.
- The second part-the prohibited transaction exemption-also became on February 16, but a non-enforcement policy delayed most, but not all, of its conditions to December 21.
- The condition now in effect is satisfaction of the Impartial Conduct Standards.
The DOL’s prohibited transaction exemption (PTE) 2020-02 (Improving Investment Advice for Workers & Retirees) allows investment advisers, broker-dealers, banks, and insurance companies (“financial institutions”), and their representatives (“investment professionals”), to receive conflicted compensation resulting from non-discretionary fiduciary investment advice to retirement plans, participants and IRA owners (“retirement investors”).
Continue reading Best Interest Standard of Care for Advisors #53
