More On Legal & Compliancefrom The Advisor's Professional Library
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
- Anti-Fraud Provisions of the Investment Advisers Act RIAs and IARs should view themselves as fiduciaries at all times, whether they meet the legal definition or not. Deviating from the fiduciary standard of full disclosure while courting clients may cause the advisor significant problems.
Members of the New Democrat Coalition told Labor Secretary Thomas Perez Monday that they would like to “establish a dialogue” with him to discuss their concerns about DOL’s re-release later this year of its rule to amend the definition of fiduciary under ERISA.
In the Monday letter to Perez, signed by 30 House Democrats, the coalition noted Perez’s “commitment to the work with the Hill” on DOL’s fiduciary project during this confirmation hearing, and said that given the Coalition’s “history with respect to the Dodd-Frank Act and the fiduciary issue,” the members would like to discuss “two core concerns” they have about the DOL’s fiduciary redraft.
First, they said, “we continue to believe that any new definition should not limit access to investment education and information.” While the original rule released in 2010 would have “had little effect on wealthy investors or large businesses, it inadvertently could have significantly restricted the availability of investment advice to low- and middle-income individuals and small businesses.”
The original rule could have also “created problems under existing prohibited transaction rules and limited plan participants’ access to investment advice even when it was in their best interest,” the coalition members wrote. “We ask you to work with us to ensure that any reproposal does not have similar effects."
DOL is expected to release its revised plan in August.
The coalition also pointed to the need for “coordination with other regulators to ensure that all regulatory efforts with respect to the fiduciary standards work together in a way that serves retirement savers effectively.”
A "key objective" of Dodd-Frank with respect to fiduciary standards, the coalition said, "was to protect investors while reducing confusion." This "should be an important consideration in the department's coordination with other regulators."
Check out Biggest Uncertainty for Retirement Advisors: What Will Fiduciary Look Like? on ThinkAdvisor.