HR Professionals

Birmingham Senior Counsel Deborah Hembree provided insight on the Department of Labor’s recently vacated fiduciary rule in an article published in the July 2018 issue of HR Professionals Magazine.

The April 6, 2016 final rule from the DOL modified who would be considered an “investment advice fiduciary” and what investment advice could bring a financial advisor within the realm of fiduciary duty, and after several months of planning and policy changes from financial services institutions to comply with the standard, the Fiduciary Rule was vacated on March 15, 2018 by the Fifth Circuit. The court found that the Fiduciary Rule, which has long been one of the most pressing issues of discussion in financial services, DOL overreached in expanding the definition of “fiduciary” beyond those “investment advice fiduciaries” who render advice regularly and as the primary bases for a client’s investment decisions.

In response to this latest development, plan sponsors should remain mindful of the changing nature of the Fiduciary Rule implementation and the involvement of the SEC. Because the rule has been in the news and participants have become more aware of the duties that are owed to them, which Hembree outlines in this HR Professionals Magazine article, sponsors should be wary of additional changes made to fee structures in their plans and the disclosures made by their financial advisors.

“Competitively, some financial advisors may continue to offer complete fiduciary services” Hembree adds. “Plan sponsors should investigate the nature of these services and confirm their financial advisors’ fiduciary status, maintaining any related documentation.”

For the full article, please click here:

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