On Friday, the Department of Labor (DOL) issued its second set of FAQs relating to the new fiduciary rule scheduled to become effective, in large part, on April 10th, 2017. Without attempting to summarize each of the 30 questions and answers, we wanted to address four key takeaways.
First, the current DOL is continuing to operate as if the new fiduciary rule will go into effect as planned. We’ve already written about the significant amount of uncertainty relating to existing laws and regulations already in effect, let alone those scheduled to become effective soon. Until and unless the DOL hears otherwise, and the President-Elect’s Twitter account has not yet taken aim at the fiduciary regulation, it’s continuing to provide interpretive guidance.
Second, this set shifts the focus from financial professionals to investors/consumers. The previous set was intended to help financial professionals understand how to interpret various aspects of the guidance, while the new set is intended to help individual investors better understand the underlying purposes and intended outcomes.
Third, the DOL continues to emphasize why the new guidance was necessary. In short, it sees and is worried about the rampant conflicts of interest presented by working with a non-fiduciary. Those concerns will continue to exist – and may even be stronger – if the rule is abandoned or materially changed.
Fourth, the FAQs include an Appendix with 10 questions an investor should ask his or her adviser. Many of these questions exist in previous DOL guidance, but the Appendix will likely serve as a one-stop-shop for important questions to pose in the future.
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