Compliance with Shifting Regulation Requires Flexible Technology
The U.S. Department of Labor (DOL) introduced the fiduciary rule in 2010 in effort to limit conflicts of interest on retirement accounts. The ruling requires retirement-account advisors to act in the best interest of their clients by not charging more than reasonable compensation and by not offering conflicted advice on retirement products.
DOL Fiduciary Rule update
The controversial ruling has faced a series of roadblocks from inception until present day, causing many firms to put compliance efforts on the back burner. However, on May 22, 2017, the Department of Labor Secretary Alexander Acosta gave the industry clarity in an op-ed confirming that the DOL Fiduciary Rule implementation would continue as scheduled on June 9. What once was a distant threat is now an inevitable reality.
The DOL further clarified two provisions — one expanding the definition of who is a fiduciary and another establishing an impartial conduct standard — would apply when the delay ended on June 9, 2017. However, the enforcement of the best-interest contract exemption (BICE) remains on hold, for now, until 2019.
This means that although the DOL will not penalize firms prior to the final implementation deadline, firms that provide advice to retirement accounts must take necessary precautions — like documenting changes and alerting clients of changes in fees and retirement products.
DOL Fiduciary Rule Resources
- DOL Fiduciary Rule Knowledge Center
Visit Vestmark's knowledge center to download the fiduciary rule roadmap infographic to find out the 6 steps you need to take to show that you are acting in good faith to comply with the rule.
- Q&A: DOL Fiduciary Rule
Rob Klapprodt, President at Vestmark, discusses the phased implementation of the fiduciary rule and the technology needed for a fee-based advisory structure.
- DOL Webinar - Beyond Hype Into Reality
The implications of fiduciary rule compliance will cost an estimated nearly $20 trillion in assets. Advisors and investment managers must meet the DOL's fiduciary requirements across all retirement accounts (regardless of size) or eliminate their services to these accounts.
- VestmarkONE for the DOL Fiduciary Rule
Learn how VestmarkONE can help your firm maintain compliance in this ever-evolving regulatory environment. Our robust, rules-based compliance engine can monitor accounts for outliers and trigger alerts for up to 10,000 accounts in a matter of moments, provide an audit trail to document and store your recommendations and changes, and report options flexibly for granular transparency.