More On Legal & Compliancefrom The Advisor's Professional Library
- The New and Improved Form ADV Whether an RIA is describing its investment strategy in advertisements or in the new Form ADV Part 2, it is important the firm articulates material risks faced by advisory clients and avoids language that might be construed as a guarantee.
- Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients financial well-being may be jeopardized. RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.
Industry trade groups told the Department of Labor in a Jan. 12 letter that it would be impossible for them to provide data to DOL concerning conflicts of interest brokers face in advising IRAs by Jan. 15, and requested a meeting to “clarify and refine” DOL’s original request.
In a joint letter to Joseph Piacentini, director of the DOL’s Employee Benefits Security Administration’s Office of Policy and Research, the trade groups said that while they “hope” the DOL’s expanded “regulatory impact analysis” assessing the impact of the department’s reproposed fiduciary rule on ERISA plans and IRAs is successful, none of the groups have the particular information requested, although the groups said they “do have access to providers who may be able to assist.”
“We would like to meet with you to discuss clarifying and perhaps refining the requested information,” the trade groups said. The groups included the Financial Services Institute, the Financial Services Roundtable, the Securities Industry and Financial Markets Association, the American Council of Life Insurers, the Insured Retirement Institute and the American Bankers Association.
Through an expanded dialogue on these issues, the groups said, “we can then fully understand the information and data needs of the Department and, in turn can then reach out to our respective members to determine what information the industry is able to provide.”
Dale Brown (left), president and CEO of FSI, said in a statement that while the groups “are pleased the administration wants to learn more about our industry so they can make a more informed decision in the future,… we need more guidance from the department, and hopefully we can meet soon and get started on the process.”
No meeting has been scheduled.
EBSA’s Office of Policy Research sent a letter to industry trade groups on Dec. 15 asking for each group’s “voluntary assistance” in helping the Obama administration in its newly expanded regulatory impact analysis that will assess the impact of the reproposed fiduciary rule on ERISA plans and IRAs. Applying a fiduciary standard to IRAs is one of the more controversial aspects of the reproposal.
EBSA asked the groups to provide it with data that will “more rigorously and definitively determine what impact, if any, conflicts of interest faced by brokers or others who advise IRAs have on IRA investors.”
EBSA asked the trade groups to provide such data within 30 days.
The DOL plans to release its reproposed rule revising the definition of fiduciary under the Employee Retirement Income Security Act during the first half of 2012.