The Department of Labor’s new regulations regarding Advisors providing advice on IRA Rollovers goes into effect on Friday, July 1, 2022. With the July 1st date quickly approaching, make sure you are up-to-date and prepared on how this change affects you, your clients and your firm.
To help you understand exactly what this means for you, our Chief Compliance Officer, Stacy Sizemore, IACCP®, has created an FAQ document that includes specific details of the new rule and how it will change things moving forward. Here are a few snippets from the full fact sheet that you should know:
Q: When does the New Fiduciary Rule go into effect?
Friday, July 1, 2022 On this date, the final piece of the DOL’s New Fiduciary Rule will go into effect. After months of research, working with attorneys, reviewing peer disclosures, and listening to calls regarding the new rule, the tru Independence team has drafted policies and a form for our advisors and clients.
Note: The rule is not retroactive and is for new rollover advice given by you as of the 1st.
Q: What is a “Fiduciary” for the Rule?
Under Title I of the Employee Retirement Income Security Act (“ERISA”) which are laws governing retirement accounts, and the department of Labor, an Advisor to a Plan is a fiduciary when “render[ing] investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such [P]lan, or ha[ving] any authority or responsibility to do so.”
What this means is that when we provide investment advice to Clients regarding their retirement plan account or individual retirement account, Advisors are fiduciaries, must act in the best interests of their clients, and put their clients’ interests above their own.
Q: Can I still get paid for my advice?
Yes! The DOL’s Fiduciary Rule includes the Prohibited Transaction Exemption 2020-02 (“PTE 2020-02”) which was put in place for several reasons: to expand the definition of “fiduciary investment advice”, to provide protection for Advisors when providing advice to retirement investors under ERISA and accepting compensation for that advice, and to provide additional disclosure about rollovers to clients. With this, you can get paid.
