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New Concerns for Retirement Plan Providers (Investment News)

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If you provide financial services to Employee Retirement Income Security Act of 1974 plans, you may not acknowledge fiduciary status — but you still need to consider the structure, amount, and distribution of fees associated with your products or services. As the recent Ameriprise lawsuit has demonstrated, just about anyone in the financial services industry is vulnerable to investigation. And a recent bulletin from ERISA attorney Fred Reisch indicated that the Labor Department is increasing efforts to identify improper or undisclosed compensation by service providers under the DOL’s Consultant/Adviser project.

Reisch noted that the term service provider is very broad. “Providers such as broker-dealers who do not acknowledge fiduciary status … may nonetheless become functional fiduciaries by virtue of providing individualized advice or being able to set their compensation,” he said.