The DOL “Best Interests” Status
The DOL fiduciary ruling proceeded with the transition period on June 9, 2017. According to a recent enforcement bulletin, “during the phased implementation period ending on January 1, 2018, the Department will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions.”
Do you have a process in place to capture and archive the relevant data for recommending products or making recommendations for qualified retirement plans and 401(k)-to-IRA rollovers?
Corey Fiedler, VP of Product Management for Broadridge Financial Solutions, cautions advisors to be fully prepared for the following:
- Data. Fund data is required to evaluate and disclose recommendations. Where will you get it, and are you sure it’s up to date?
- Rollovers. Documentation of 401(k)-to-IRA advisor recommendations is required on June 9 and fee transparency is critical. What’s your process?
- Fund suitability. Higher fiduciary standards are the new norm in all transactions. How will you compare and confirm which fund is most suitable?
- Share class suitability. Each fund has numerous share classes that may be offered for different scenarios. How will you help your customer determine which is the best fit?