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Fiduciary Related News and Intelligence

These are general fiduciary news items. Other topical areas you may find of interest that are not fully covered here include ERISA 404(c) Compliance and Fiduciary Duty, 401k Investment Committees and Fiduciary Responsibility and Liability Issues.


Former Employee Plan Participants: What Is in Their Best Interest?

Summary: Given the large impact excessive fees can have on former participant IRA rollovers, sponsors are beginning to evaluate potential solutions to address these issues and to assist their former employees. Regardless of employment status, companies and their retirement committees want current and former employees to be able to stay on a path toward a successful retirement. Article discusses of what some sponsors are currently doing and a few ideas concerning future changes within the industry that should help protect former employees' retirement savings.

Source: Milliman.com, May 2015

Proposed Fiduciary Definition Regulations Will Impact Investment Adviser Practices

Summary: One result of the proposed regulations and accompanying prohibited transaction exemptions is the "ERISAfication" of IRAs. Because of the significant changes in operation that might be required for investment advisers and other plan consultants, it is important to anticipate how these proposals could impact current practices.

Source: Faegrebd.com, May 2015

What's the Difference Between "Sole" Interests and "Best" Interests?

Summary: So what is the difference between "sole" interest and "best" interest? And why does it matter? Fi360 CEO Blaine Aikin looks at this distinction and asks whether some conflicts are what's "best" for investors.

Source: Fi360.com, May 2015

Lawmakers Ask DOL's Perez to Extend Fiduciary Comment Period

Summary: Lawmakers asked Labor Secretary Thomas Perez in two separate letters this week to extend by another 45 days the comment period on the Department's redraft of its rule to amend the definition of fiduciary under ERISA. Fiduciary advocates tell Perez to rebuff requests.

Source: Thinkadvisor.com, May 2015

Retirement in America: The Fiduciary Definition in Context

Summary: The DOL recently proposed new regulations to address the changing times and to help eliminate conflicts of interest in retirement planning and investing. This 13 page white paper take a look at the bigger retirement picture, and consider how the DOL’s proposal may affect retirement preparation in the United States.

Source: Mtrustcompany.com , May 2015

Schwab CEO: Better That DOL Goes First on Fiduciary Rule

Summary: Like most financial industry officials, Charles Schwab Corp. president and chief executive Walter Bettinger II wants the DOL and the SEC to coordinate their efforts on raising investment advice standards for brokers. But, he's afraid that DOL and SEC could end up with two different standards, and that would confuse the public.

Source: Investmentnews.com (registration may be required), May 2015

The New Fiduciary Advice Regulation and Its Likely Impact on Advisors

Summary: The proposed fiduciary definition changes are so great that advisors should be aware of them now and perhaps begin adapting their practices to the anticipated changes. This article discusses the DOL proposal and the exemption for commissions (and, possibly, rollovers) and their likely impact on advisors.

Source: Hartfordfunds.com, May 2015

Impact of Updated Fiduciary Investment Advice Definition on Large Plans

Summary: The proposed DOL fiduciary regulations are expected to have a transformational impact on the retirement landscape. The most fundamental effects of the proposed regulations will be on small plans and IRAs, as well as their investment advisers, consultants or other service providers. However, the proposed regulations will also impact the landscape for large retirement plans in various ways as outlined here.

Source: Kilpatricktownsend.com, May 2015

What Does Retirement Plan "Best Interests" Really Mean

Summary: The DOL asserts the new fiduciary rule will require brokers to act in the "best interest" of the clients they serve, whether they be institutional or individual. But the DOL never really defines exactly what "best interest" means. Author canvassed retirement plan service providers from coast to coast to see if he could discover the phrase means.

Source: Fiduciarynews.com, May 2015

Are You My Fiduciary?

Summary: When the DOL's proposed fiduciary regulation becomes effective, plan sponsors, IRA owners and plan participants should be asking, "Are You My Fiduciary"? Understanding whether or not the protective wing of a fiduciary pertains to the plan or IRA will require an analysis of both the proposed expansion of the rule and its complex exceptions.

Source: Benefitsbryancave.com, May 2015

What the DOL Fiduciary Proposal Means for Banks

Summary: The DOL issued a draft proposal earlier this month that would require financial advisers to provide retirement savings advice that is in a customer's "best interest" in an effort to minimize conflicts of interest. This article lays out some frequently asked questions about the rule, including why it's important for bankers.

Source: Financial-Planning.com, May 2015

Five Ways the DOL Could Improve Its Fiduciary Proposal

Summary: Objective observers should conclude that it is too early to tell exactly how this complicated fiduciary proposal will affect the advice market. But it is, in fact, a proposal, not a final rule, and public comments may bring about some needed clarifications and changes. Here is the author's list of five steps the DOL could take to improve the proposal.

Source: Pensionsbenefitslaw.com, April 2015

Senate Democrats Push Back on DOL Fiduciary Plan

Summary: The Obama administration plan to tighten rules on brokers is facing blowback from the president's own party. Key Senate Democrats met this week with Labor Secretary Tom Perez to argue that his plan could backfire and make it harder for consumers to get investment advice.

Source: Thinkadvisor.com, April 2015

Department of Labor Issues Sweeping Fiduciary Rule Proposal

Summary: Labor Secretary Thomas Perez described the sweeping proposal as follows: "This boils down to a very simple concept: if someone is paid to give you retirement investment advice, that person should be working in your best interest." Yet, the more than 120-page proposed rule is far from simple. Its requirements and impact on access to advice about retirement savings accounts are far from certain.

Source: Littler.com, April 2015

Execs See Fiduciary Proposal as Complicated, Costly

Summary: Early assessments of the Department of Labor's fiduciary proposal find the new rules will be complicated to implement and costly for the industry, according to wealth management executives. Answering questions during recent earnings calls, industry CEOs and other leaders found themselves peppered with questions from analysts asking about the impact a new rule may have on the bottom line.

Source: Financial-Planning.com, April 2015

DOL Not Budging on Fiduciary Rule Comment Period

Summary: Labor Secretary Thomas Perez indicated Thursday that his department will not extend further the 75-day comment period for its redraft to amend the definition of fiduciary under the Employee Retirement Income Security Act.

Source: Thinkadvisor.com, April 2015

The New Fiduciary Regulation Proposal, Part I: All It Was Cracked Up to Be?

Summary: This five page document gives a quick outline of what the DOL's new fiduciary proposal does, along with our first impressions. It concludes that "the industry are approaching the proposal with caution and, perhaps, some level of optimism."

Source: Ihflaw.com , April 2015

Re-Proposed Definition of a Fiduciary Widely Prohibits Personalized Investment Assistance

Summary: The framework set up by the DOL could work conceptually, but in its current form, it would have the same effects as the original 2010 proposal -- cutting off the option for low and middle-income individuals and small businesses to receive personalized investment assistance.

Source: Davis-Harman.com , April 2015

Will Brokers Bow to Higher Fiduciary Standard?

Summary: One of the most hotly debated topics in wealth management is the role of the stockbroker. The DOL entered the fray by unveiling a plan to make registered representatives of brokerages meet the same standard as those overseeing client accounts at registered investment advisers. Still, any shake-up hinges on politics, with lobbyists for the brokerage industry seeking to soften the blow.

Source: Institutionalinvestor.com, April 2015

Why Exactly DOL's Latest Action Is So Shocking to So Many Brokers

Summary: The DOL unveiled its much anticipated conflict of interest rule for retirement investment advice. The financial services industry has been anticipating stiff 401k rules for years. Even so, the 120-page proposed rule was a shocker, carrying an IRA bombshell and a brand new "best interest standard" for brokers.

Source: Riabiz.com, April 2015

DOL Reproposes Fiduciary Rule for ERISA Plans and IRAs

Summary: The DOL issued a proposed rule defining the term fiduciary for investment advisers and brokers providing investment advice to participants or beneficiaries of ERISA-governed employee benefit plans and IRAs. The DOL also issued several new and amended versions of prohibited transaction exemptions in connection with the proposed rule. This is a comprehensive overview.

Source: Practicallaw.com, April 2015

Captrust's May Fiduciary Update

Summary: This quarter saw continuing activity in the area of cases involving plan and investment fees. Plan fiduciaries settled two significant cases and follow-on cases against Fidelity concerning float income practices were dismissed.

Source: Captrustadvisors.com, April 2015

DOL Proposes New Fiduciary Rule for Retirement Advisors

Summary: The DOL published its long awaited proposed rule addressing conflicts of interest in retirement advice. This is an overview of the proposed rule prepared by the Wagner Law Group.

Source: Wagnerlawgroup.com, April 2015

DOL's Fiduciary Proposal Preserves Advice -- But at What Cost?

Summary: While initial concerns about preserving the ability for 401k participants to work with the advisor of their choice on rollovers appear to be addressed in the new DOL fiduciary proposal, the new compliance regimen looks, according to the author, to be significant, adding cost and complexity to the process.

Source: Usaretirement.org, April 2015

DOL Seeks Comments on Proposed Retirement Advice Rule

Summary: While much of the concerns behind the DOL's fiduciary rule proposal involve conflicted investment advice to individual retirement account holders, the sweeping rule would also change how advice is provided to participants in 401k and other defined contribution plans.

Source: Shrm.org, April 2015

Game Changer: A First Look at the DOL's 2015 Conflict Of Interest Proposal

Summary: The retirement plan industry has been waiting for an updated definition of fiduciary regulation from the DOL since 2010. On April 14, 2015, we got it and, at first glance, it's a game-changer. The purpose of this article is to provide a technical, "first glance" overview of the proposal and some early thoughts about possible ramifications.

Source: Napa-net.org , April 2015

A First Look at the DOL's Revised Fiduciary Rule

Summary: U.S. Secretary of Labor Tom Perez introduced the DOL's proposed new fiduciary rule which will expand the types of retirement investment advice covered by fiduciary protections. Here is our first look at the proposal.

Source: 401khelpcenter.com, April 2015

SEC's Commitment to Tougher Broker Rules Questioned

Summary: The Institute for the Fiduciary Standard said Thursday it has doubts about the SEC's ability to formulate a fiduciary standard that will protect the interest of Americans trying to save for retirement.

Source: Benefitspro.com, April 2015

Mary Jo White's Support Nudges Fiduciary Standard Forward

Summary: The SEC Chief says she favors a standard that covers all retirement plan advisers. Plan sponsors are hopeful, despite the difficult politics.

Source: Institutionalinvestor.com, March 2015

NAPA Adopts Proactive Stance Against Fiduciary Standard

Summary: Brian Graff, executive director and CEO of NAPA, says that the retirement business has at long last come onto Washington's radar, but the increased scrutiny is exposing a series of long-standing biases against retirement advisers that he fears will ultimately make it difficult for them to provide assistance to employees who need it the most.

Source: Benefitnews.com, March 2015

SEC Aligns With White House on Need to Address Fiduciary Standards

Summary: SEC Chair Mary Jo White confirmed March 17 that the Commission will "implement a uniform fiduciary duty for broker-dealers and investment advisors where the standard is to act in the best interest of the investor."

Source: Asppa.org, March 2015

SIFMA Claims White House Figures on DOL Rule Flawed

Summary: The White House is using flawed methodology to assert that abusive trading practices are costing U.S. investors up to $17 billion a year in retirement savings, according to a report released by a Wall Street group that opposes toughening rules on brokers.

Source: Investmentnews.com, March 2015

Wall Street Seeks Wedge in Fight Against 401k Rules

Summary: There's a gap between the White House and Wall Street's main regulator over a push to tighten broker rules. To the investment industry, it's an opening to exploit.

Source: Benefitspro.com, March 2015

Bill Would Require DOL to Defer Release of Fiduciary Definition

Summary: Rep. Ann Wagner has introduced the Retail Investors Protection Act which would require the DOL to defer release of new fiduciary regulations until the SEC issues fiduciary regulations first.

Source: Ascensus.com, March 2015

Supreme Court Could Take on Case Involving Fiduciary Burden of Proof, Damages

Summary: The Supreme Court signaled its interest in taking a case questioning whether fiduciaries bear the burden of proof and whether they can be liable for monetary damages. In orders issued Monday, the Supreme Court asked for the solicitor general's opinion before deciding whether to grant the petition for review.

Source: Pionline.com, March 2015

DC Execs Expecting Big Changes From Obama Push On Fiduciary Standard

Summary: With President Barack Obama now leading the charge, a multiyear battle to update a fiduciary standard for anyone giving retirement investment advice has defined contribution plan executives and service providers bracing for big changes.

Source: Pionline.com, March 2015

The Blindsided Fiduciary: Ignorance Is Not Bliss

Summary: Alliance Bernstein recently released the shocking result of a survey it had taken of plan sponsors: a whopping 37% of those fiduciaries surveyed didn't know that they were fiduciaries. It is possible to be an ERISA fiduciary and not know it, because no acknowledgement of fiduciary status is required. Article has a short checklist of people who are or are not fiduciaries.

Source: Pensionsbenefitslaw.com, February 2015

SEC's Gallagher: Fiduciary Rulemaking a "Runaway Train"

Summary: The DOL's much-anticipated fiduciary reproposal drew intense criticism Feb. 20 from SEC Commissioner Daniel M. Gallagher. Gallagher’s comments, made at the "SEC Speaks in 2015" event, were particularly harsh. Not only regarding the potential impact of the DOL's proposed extension of ERISA's fiduciary definition, but also on the process undertaken thus far in pursuit of its implementation.

Source: Napa-net.org, February 2015

President to Move Fiduciary Rule Forward

Summary: President Barack Obama is expected to announce the DOL's proposed fiduciary rule is officially under review at the Office of Budget Management. The proposed rule would require advisors overseeing retirement plans to act under a fiduciary standard, putting client interests ahead of all other considerations when making investment recommendations.

Source: Wealthmanagement.com, February 2015

SEC Chief to Break Her Silence on Fiduciary in 'Short Term'

Summary: SEC's Mary Jo White said Friday that she would speak about her position regarding a rule to put brokers under a fiduciary mandate "in the short term," stating that it remains a priority of hers "to get the Commission in a position to make that decision" on such a rule. SEC has been providing "technical assistance" to the DOL on its fiduciary rulemaking.

Source: Thinkadvisor.com, February 2015

U.S. Chamber Examines Potential Harmful Impact of Fiduciary Regulation on Investors

Summary: In anticipation of the DOL's re-proposal of the definition of fiduciary regulation, the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness and Labor, Immigration and Employee Benefits division released a white paper on the potential negative, unintended consequences of broadening the current definition of fiduciary.

Source: 401khelpcenter.com, February 2015

The Future of Outsourcing 3(16) Fiduciary Services

Summary: With the popularity of fiduciary outsourcing there has been a significant wave of new companies who will take on these delegated rolls, and recently, there has been a surge in the 3(16) Plan Administrative space. The focus of this article is on the 3(16) Plan Administrative fiduciary.

Source: Tparesources.com, February 2015

The Uninsured Fiduciary: Have You Read the Fine Print in Your Policy?

Summary: If you are a plan fiduciary and your company has purchased fiduciary liability insurance, you and your board may have simply assumed that the policy would cover any fiduciary breach. A decision just issued by a Pennsylvania court denying coverage to CIGNA is a wakeup call to carefully review such policies to determine what they do and do not cover.

Source: Pensionsbenefitslaw.com, February 2015

The Different Roles Your Plan's Advisor May Play

Summary: Is your advisor a fiduciary or a co-fiduciary for your plan? Or, is your advisor refusing to assume any fiduciary role? Is your business liable for your retirement plan's investment decisions? Is your investment advisor, your plan's investment manager? These can be confusing roles with very different impacts to your organization's retirement plan.

Source: Belr.com, February 2015

How to Satisfy the Fiduciary Duties of Your 401k Plan

Summary: If your organization sponsors a 401k or qualified retirement plan, then, as a plan trustee, you are legally responsible for the decision-making surrounding the plan. These fiduciary duties are something many plan sponsors aren't aware of. But even if trustees recognize them, they usually don't understand what the responsibilities entail.

Source: Sbnonline.com, February 2015

New Best Practices Aim to Codify Advisors' Fiduciary Duty

Summary: A coalition of fiduciary advocates has unveiled a set of best practices for advisors that they envision could eventually become an industry certification, providing consumers with an easily recognizable designation that a financial professional is bound to act in their best interest.

Source: Onwallstreet.com, February 2015

The White House Puts Its Best Obamacare Minds Behind Cleaning Up the 401k Business

Summary: It took forever to come but The White House has endorsed a very intense fiduciary standard with a withering attack on the way financial advice is currently applied to the savings of retirees.

Source: Riabiz.com, January 2015

Fiduciary Best Practices Proposed

Summary: The Institute for the Fiduciary Standard has proposed eleven "Best Practices" fiduciaries should meet to serve the best interest of their clients. They are reproduced here and the Institute is seeking comment.

Source: 401khelpcenter.com, January 2015

NAPA Takes Position Against DOL's Fiduciary Rule

Summary: This month, the DOL is expected to propose a "fiduciary rule" for financial advisors that provide investment advice to retirement plans. It is the authors opinion that, "when you pay a financial advisor for investment advice, they should work in your best interest and not theirs." But, a growing number of powerful industry groups disagree.

Source: Employeefiduciary.com, January 2015

Why Brokers Should Be Bound to a Fiduciary Duty

Summary: It would be highly controversial for Obama to impose the higher legal standard, called a fiduciary duty, on brokers. Wall Street will hate the requirement that brokers act solely in a client's interest or risk getting sued, and will probably ask Congress to overturn it.

Source: Benefitspro.com, January 2015

Can a Fiduciary Duty for Investment Advisers Co-Exist With Commissions?

Summary: Legislative and regulatory consultant Duane Thompson writes, "Given the premise that a fee arrangement is inextricably bound with the fiduciary standard, it would seem logical to assume that a salesperson working on commission cannot be a fiduciary. However -- spoiler alert -- you would be wrong. That is not to say that working on a commission basis and serving the client's best interest is an easy thing to do -- it's just far more difficult, at least in legal terms."

Source: Kitces.com, January 2015

White House Memo Offers a Peek at DOL Fiduciary Strategy

Summary: The White House believes that many retirement plan participants aren't adequately protected from advisors with conflicts of interest. That's why President Barack Obama's chief economic advisor supports the DOL's effort to amend the definition of fiduciary in retirement plans.

Source: Thinkadvisor.com, January 2015

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