Erin Sweeney Quoted Regarding Changes Between Proposed and Final DOL Fiduciary Rule in Compliance Week

"Even with concessions, Labor Department's fiduciary rule is still controversial"
Compliance Week
04.12.16

Erin Sweeney was quoted regarding changes between the proposed and final fiduciary rule issued by the U.S. Department of Labor (DOL). A notable change in the final rule is that it moves beyond the eight-month implementation fast track originally proposed. The "most onerous provisions of the regulation," including preparation of policies and procedures, new disclosures and new contract provisions, will become effective on January 1, 2018, Sweeney said. "In addition, the DOL eliminated some of the most contentious disclosure requirements from the proposal, including eliminating the requirement to develop investment projections and distribute an annual disclosure to investors."

Other changes include exempting plans covered by ERISA from the requirement that a fiduciary investment adviser enter into a written contract with an investor prior to making a recommendation. "Although IRAs and non-ERISA plans remain subject to the written contract requirement, the final regulation clarifies that the contract provisions can be incorporated into account opening documents," Sweeney said. "Existing clients need not execute a new written contract. Instead, advice providers can notify current clients of the amendments and, if the client does not object to the modifications, the new provisions will become part of the existing agreement between the advice provider and the investor."

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