The DOL Responds to Fiduciary Rule Questions

The Department of Labor released its first substantial guidance today related to the controversial fiduciary rule.

The 24-page guidance includes answers to 34 questions received since the rule was published in April. Many of the questions cover basic areas of applicability, but the DOL does attempt to address a few thorny issues with the guidance.

For example, one question asked how advice on new money invested into a “grandfathered” account would be treated. Grandfathered accounts that predated the rule applicability date are not affected.

But any advice on new money to that account must comply with the new rules, the DOL wrote.
The fiduciary rule exemption requirements take effect April 10, 2017. The recordkeeping and full disclosure and contract aspects take effect Jan. 1, 2018.

Phyllis Borzi, assistant secretary of Labor for DOL’s Employee Benefits Security Administration, said the FAQs show the DOL is trying to work with the industry.

"These questions are an important part of the regulatory process as they allow the department to clarify important parts of the rule, and head off misunderstandings that could lead to bad results for retirement savers, or financial services professionals," she said in a Thursday blog post. "Gathering these questions from multiple sources and making the answers public is another example of our sincere efforts to work with the financial services industry to craft a rule that makes sense and works in the real world of investment advice."

Several lawsuits are pending to stop the DOL rule in Minnesota, Kansas, Texas and Washington, D.C. federal courts.

The DOL has said further guidance will be released as the applicability date gets closer.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com.

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