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August 28, 2017 at 10:47 AM
In his column in the September issue of Investment Advisor, Tom Giachetti addressed the post-transition period; specifically, the best-interest contract.
In addition to the many disclosures non-level-fee fiduciaries must make when they execute a best-interest contract with new or existing clients, advisors must also make disclosures about their website and make certain information available there.
(Related: Fiduciary Rule Delay Comes With Its Own Set of Problems)
The best-interest contract must include disclosures of the advisor’s website (discussed further below), identified via URL. The contract must also include statements that inform the client that model contract disclosures are available and updated quarterly via the website, and that a written description of the firm’s policies and procedures adopted pursuant to the Department of Labor’s fiduciary rule can be accessed free of charge through the website.
Lastly, the contract must provide a link to a firm-maintained website, which is updated no less than quarterly and contains:
• A discussion of the firm’s business model and its material conflicts of interest
• A schedule of typical account fees
• A model advisory contract
