With just 5 months to go before the fiduciary rule kicks in, advisors will need to familiarize themselves with steps of the process needed to be DOL-compliant. These include requirements pertaining to client education, fact-finding, documentation, production recommendations and post-sale plan reviews.
The requirements will vary, depending on whether you’re a level-fee fiduciary or derive variable commissions from product sales. The latter will be beholden to the more stringent provisions of the rule’s best interest contract exemption or BICE.
Among them: insuring that recommendations are prudent; statements are not misleading; and advisors avoid material conflicts of interest, acting without regard to their own or their financial institution’s interests. Compensation, whether level-fee or variable, must also be “reasonable.”
With or without a BICE, best interest standards will apply. The infographic below from Nationwide Retirement Institute outlines a checklist of items to implement and review as you prepare for the rule’s phase-in between April 10, 2017 and January 1, 2018.