The Department of Labor (DOL) on April 14 released proposed regulations redefining what it means to be a fiduciary under ERISA. The regulations raise many questions for many retirement plan professionals — including 403(b) and 457 advisors, as well as those who work with IRAs.
In a new podcast on NTSA Net, NTSA Executive Director Chris DeGrassi discussed the proposed rule and its implications for NTSA members.
DeGrassi said that those who work with IRAs should be especially concerned. “If you do IRA business, plan to do IRA business and work in the IRA business as an investment advisor, registered representative or an insurance agent, you are covered under this new regulation,” he said.
What does that mean? “The proposed regulation required that you have to act in a client’s best interest. That seems reasonable enough; however, the new regulation also imposes a whole set of new restrictions and requirements and rules that you need to comply with in order to service your clients,” DeGrassi said. He also cautioned that the proposed regulation does not allow incentives and other forms of compensation that are standard in the industry.
“The regulations are rather significant and would require significant changes to business models throughout the industry,” DeGrassi said.
So what can an advisor do right now? DeGrassi suggests:
Look for more podcasts — as well as webcasts, news coverage, analysis and commentary — about the DOL rule as the regulatory review period unfolds. Additionally, the rule will be the focus of a special regulatory update session at the upcoming NTSA 403(b) Summit, to be held in Nashville, Tenn. June 28-30. For more information about the Summit, click here.
In a new podcast on NTSA Net, NTSA Executive Director Chris DeGrassi discussed the proposed rule and its implications for NTSA members.
DeGrassi said that those who work with IRAs should be especially concerned. “If you do IRA business, plan to do IRA business and work in the IRA business as an investment advisor, registered representative or an insurance agent, you are covered under this new regulation,” he said.
What does that mean? “The proposed regulation required that you have to act in a client’s best interest. That seems reasonable enough; however, the new regulation also imposes a whole set of new restrictions and requirements and rules that you need to comply with in order to service your clients,” DeGrassi said. He also cautioned that the proposed regulation does not allow incentives and other forms of compensation that are standard in the industry.
“The regulations are rather significant and would require significant changes to business models throughout the industry,” DeGrassi said.
So what can an advisor do right now? DeGrassi suggests:
- educate yourself on what the regulations mean and how they affect your business;
- stay up to date with any changes to the proposed regulations; and
- pay attention to the timeline and potential effective date of the regulations.
Look for more podcasts — as well as webcasts, news coverage, analysis and commentary — about the DOL rule as the regulatory review period unfolds. Additionally, the rule will be the focus of a special regulatory update session at the upcoming NTSA 403(b) Summit, to be held in Nashville, Tenn. June 28-30. For more information about the Summit, click here.
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