CAPTRUST has announced the hiring of Kevin D. Barry as chief investment officer. Barry will lead the firm’s Consulting Research Group, the 11-person team responsible for investment manager due diligence, asset allocation, and discretionary investment management for the firm’s advisory businesses.
Wednesday, April 05, 2017
DOL Finalizes Fiduciary Rule Extension
Late in the day on April 4, the Department of Labor (DOL) filed the much-anticipated final rule outlining the 60-day extension of the applicability date of the conflict of interest rule—otherwise known as the fiduciary rule. This filing was highlighted in the Federal Register, and the 63-page “unpublished” rule can be found here. The rule is scheduled to be formally published on Friday, April 7.
The rule and accompanying prohibited transaction exemptions (PTEs) will now be applicable on June 9, 2017 with certain provisions applicable on January 1, 2018, as previously established.
In an unexpected move, the DOL introduced a new Transition Period from June 9 through January 1, 2018, during which those meeting the updated definition of an ERISA fiduciary who also need the Best Interest Contract (BIC) Exemption will get relief from many of the more involved requirements of the exemption—so long as they adhere to the Impartial Conduct Standards for advice rendered. In short, to adhere to these standards, advice must be delivered in the best interest of the recipient, and the advice provider must charge reasonable compensation and may not make any misleading statements.
As we write this, we have not heard definitive announcements from recordkeepers on their response to the formal delay. However, our expectation is for most, if not all, to move forward with the planned approaches they had initially rolled out to comply with the rule (and any related PTEs) before this delay. Notably, the aforementioned Transition Period may affect the specifics of provider rollouts. But at this point, we do not have enough information to provide clarity on this matter. We remain committed to monitoring activity surrounding the new rule and will update you as we know more.
As always, if you have questions, please let us know.
This document is intended to be informational only. CAPTRUST does not render legal, accounting, or tax advice. Please consult the appropriate legal, accounting, or tax advisor if you require such advice. The opinions expressed in this report are subject to change without notice. This material has been prepared or is distributed solely for informational purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. The information and statistics in this report are from sources believed to be reliable but are not warranted by CAPTRUST Financial Advisors to be accurate or complete. All publication rights reserved. None of the material in this publication may be reproduced in any form without the express written permission of CAPTRUST: 919.870.6822.
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