DOL Releases Second Series of Fiduciary Rule FAQs
The Department of Labor released the second set of frequently asked questions and accompanying answers to help workers and retirement investors understand the new fiduciary standard which is scheduled to begin implementation on April 10, 2017. The first set of FAQs was released at the end of October and was aimed at financial services firms.
The fiduciary rule, which was six years in the making, attempts to reduce conflicts of interest in retirement investment advice and redefines who is considered an investment advice fiduciary under the Employee Retirement Income Security Act of 1974. According to the DOL, all who provide retirement investment advice to plans, plan fiduciaries and IRAs are required to abide by a “fiduciary” standard.
The 16-page document released on Friday, which can be read here, is written in easily accessible language and explains what is required of financial advisors under the new rule.
The 30 questions give general background information to investors on why the rule was implemented and what changes are being made to the financial services industry. Questions include, “Who is a fiduciary adviser under the rule?”; “Does the best interest standard mean that my financial advisor is automatically liable if I lose money in my retirement account when I follow his recommendation?”; and “What circumstances require my financial adviser to give me a “Best Interest Contract” for my IRA investments?”
The document also includes a set of 10 questions retirement investors should ask their financial adviser.
