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The U.S. Department of Labor (DOL) has issued a new fiduciary rule that applies to qualified retirement accounts.  Qualified retirement accounts include individual retirement accounts (IRAs) and retirement plans with less than $50,000,000 in assets.  Portions of the rule are effective on June 9, 2017 for a transition period through January 1, 2018 when other portions of the rule are currently scheduled to become effective, but could be delayed or modified.

Effective June 9, 2017, the DOL has expanded the definition of who is a Fiduciary to include all individuals who provide investment advice to qualified retirement accounts for a fee.  Those fiduciaries are required to comply with impartial conduct standards that ensure advisors adhere to fiduciary norms and basic standards of fair dealing. The standards specifically require advisors and financial institutions to:

  • Give advice that is in the “best interest” of the retirement investor. This best interest standard has two chief components: prudence and loyalty:
    • Under the prudence standard, the advice must meet a professional standard of care
    • Under the loyalty standard, the advice must be based solely on the interests of the customer, rather than the competing financial interest of the advisor or financial institution
  • Charge no more than reasonable compensation; and
  • Make no misleading statements about investment transactions, compensation, and conflicts of interest.

When and if the other portions of the DOL rule become effective on January 1, 2018, WEAS will be required to provide important disclosures with respect to qualified retirement accounts. These disclosures will include information about applicable fiduciary standards, impacts to services, material conflicts of interest, and may include amendments to agreements. These disclosures will be available at www.wealthenhancement.com on the effective date of the other portions of the new rule. Please consult this webpage, and click on Disclosures, on or after the other portions of the new rule effective date for the disclosures. Please contact your WEAS Financial Advisor if you would like a paper copy of the disclosures, when and if they become available.