More On Legal & Compliancefrom The Advisor's Professional Library
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
- Pay-to-Play Rule Violating the pay-to-play rule can result in serious consequences, and RIAs should adopt robust policies and procedures to prevent and detect contributions made to influence the selection of the firm by a government entity.
Fifty-five House Republicans, led by Rep. Judy Biggert, R-Ill., sent a letter to Department of Labor Secretary Hilda Solis on Monday detailing what criteria should be met when the DOL re-proposes its rule amending the definition of fiduciary under ERISA early next year.
House Democrats sent a letter to Solis on Nov. 8 setting out the criteria they’d like a re-proposed fiduciary rule to follow.
The GOP lawmakers wrote in their Dec. 5 letter, “It is imperative that the Department, if it chooses to re-propose the rule, recognize the broad range of financial products and services currently available and avoid costly new regulations that may reduce choice among qualified service providers and investment products.”
To that end, the GOP lawmakers listed the following criteria that the re-proposed fiduciary rule should adhere to:
- It is carefully and effectively targeted to address well-defined and documented problems in the retirement planning advice business;
- It clearly recognizes that IRA accounts are significantly different from employer-sponsored plans because the IRA investor has nearly limitless choice among service providers and investment products;
- It ensures that plan participants and plan sponsors continue to be able to receive the critical information needed to expand retirement savings and coverage;
- It preserves investor access to and choice among suitable financial products and services delivered by qualified financial professionals;
- It avoids costly new regulatory requirements that exceed their proven benefits for investors; and
- It does not compound the investor confusion that the Securities and Exchange Commission's (SEC) recent study under the Dodd-Frank Act identified as the primary problem for retail investors. Effective regulation must add to public certainty, not diminish it.
Industry insiders debated on Dec. 1 when the SEC would issue a proposed ruling putting brokers under a fiduciary mandate.