Contributing Author: Dianne L. Schechter
The U.S. Department of Labor (the “Department”) has announced a 60-day extension of the applicability dates of the fiduciary rule and related exemptions, including the Best Interest Contract Exemption. The announcement follows a February 3, 2017, presidential memorandum which directed the Department to examine the fiduciary rule to ensure that it does not adversely affect the ability of Americans to gain access to retirement information and financial advice.
Under the terms of the extension, advisers to retirement investors will be treated as fiduciaries and have an obligation to give advice that adheres to “impartial conduct standards” beginning on June 9, 2017, rather than on April 10, 2017, as originally scheduled. These fiduciary standards require advisers to adhere to a best interest standard when making investment recommendations, charge no more than reasonable compensation for their services, and refrain from making misleading statements.
The Department has requested comments on the issues raised by the presidential memorandum, and related questions. The Department urges commenters to submit data, analysis, and information responsive to the requests so that it can complete its work pursuant to the memorandum as carefully, thoughtfully, and expeditiously as possible.
In the period between now and January 1, 2018, when all of the exemptions’ conditions are scheduled to become fully applicable, the Department intends to complete its review under the presidential memorandum and decide whether to make or propose further changes to the fiduciary rule or associated exemptions. In the absence of further action by the Department, the delay announced today does not affect the requirement to enter into a Best Interest Contract as well as other requirements that are currently scheduled for January 1, 2018.