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.
