DOL Amends and Clarifies PTE 2020-02

Advisors and financial firms must make written disclosure of their fiduciary status to investors prior to engaging in any transactions covered by PTE 2020-02. In their release, the DOL offered clarification for advisors who discuss recommendations and investment strategies in conversations that take place before the advisor is actually hired by the client. For timing purposes, it is sufficient for the advisor to make the required disclosures at or before the time a covered transaction occurs. In these types of situations, the covered transaction is deemed to have occurred at the later of (1) the date the recommendation is made, or (2) the date the advisor becomes entitled to compensation, whether payable now or in the future, because of making the recommendations. The DOL also clarified that robo-advice providers can use PTE 2020-02. For more information on PTE 2020-02, visit Tax Facts Online. : Q . Note: Q is updated.