More On Legal & Compliancefrom The Advisor's Professional Library
- Client Communication and Miscommunication RIA policies and procedures must specify what type of communications should be retained. The safest course of action is for RIAs to retain all communicationsto clients, from clients, and about client accounts. To comply with fiduciary obligations, communications must be thorough and not mislead.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
Retirement planning officials are urging the Department of Labor (DOL) and the Internal Revenue Service (IRS) to extend the Oct. 15 filing deadline for the revised Form 5500 to Dec. 31 because so many small firms are struggling to transition from a paper filing system to DOL’s new electronic filing system, EFAST2.
Craig Hoffman, general counsel and director of regulatory affairs for The American Society of Pension Professionals & Actuaries (ASPPA), told DOL in a Oct. 1 comment letter that while he acknowledged that DOL’s new EFAST2 system “is operating as expected, … due to unforeseen circumstances with the implementation of the new system, including the volume of filings plan sponsors and practitioners are experiencing, [ASPPA] believes an extension is both merited and critical in this first year of EFAST2 submissions.”
Hoffman told AdvisorOne on Monday that he had spoken with DOL since filing the comment letter and DOL was “giving our request consideration.”
The new mandatory EFAST2 electronic filing system for the 2009 Form 5500, Hoffman wrote, “represents the greatest change in qualified plan reporting since the inception of the Form 5500.”
Because of this change in reporting, Hoffman said DOL should also provide relief from filing penalties. “If a plan sponsor otherwise acts diligently and in good faith and, due to difficulties associated with the new 2009 filing requirements, is unable to meet its filing deadline, as extended pursuant to the above recommendation or otherwise, the plan sponsor should be granted relief from late filing penalties on the basis of ‘reasonable cause,’ ” he wrote.
An extension of the deadline is consistent with DOL’s efforts to ease the transition to EFAST2, Hoffman wrote, “and would benefit agencies by requiring less administration of Form 5558 by professionals who are working to meet the directive and agency staff who would be processing them. In March 2000, agencies like DOL, the IRS, and the Pension Benefit Guaranty Corporation (PBGC) recognized the burden placed on practitioners and responded with a blanket filing extension for the 1999 plan year.”