S5:E3 | Breaking Down The “New” DOL Fiduciary Rule – Lessons From The Front Lines | Compliance In Context

The Securities Compliance Podcast: Compliance In Context

Welcome back to the Compliance In Context podcast! On today’s show, we feature a Lessons From The Front Lines episode with renowned retirement plan fiduciary expert, Mr. Fred Reish, to help us through another groundbreaking DOL Fiduciary Rule and unpacking where and how it will affect investment adviser and broker-dealer firms across the country. This is an episode you won’t want to miss!

Show

Interview with Fred Reish

• Reviewing the evolving standards of care (Reg BI, RIA, DOL, NAIC)
• How have disclosures evolved to comply with the differentiated standards of care?
• What does the new DOL Fiduciary Rule say and what’s changing?
• Who is going to be impacted by the changes to this new rule?
• What are the impartial conduct standards?
• Are there disclosures and other exemptions out there to help mitigate the conflicts noted in the new rule and how can firms comply with them?
• What triggers an investment recommendation under the new rule?
• Is there a wholesaler exception?
• What is the compliance date for the new rule?
• What kinds of information does an individual need to review in order to effectively perform a comparative analysis between for an IRA recommendation?

Quotes

7:54 – “If you look at both of those, I think Reg BI for broker dealers is actually a tougher standard. I know that’s going to surprise some investment advisers to hear, that but, and part of that’s because the interpretation for investment advisors is really principles, truly principles-based. And, you know, the SEC said the duty of care and the duty of loyalty for investment advisors together is a best-interest standard of care, but very principles-based. If you get into Reg BI, the standard of care is principles-based, but then there are a bunch of rules-based parts to Reg BI, so for no other reason other than just the volume of rules alone under Reg BI make it a more complicated and more demanding set of requirements.” – Fred Reish

21:32 – “Number one, the advisor has to satisfy the impartial conduct standards. Well, what are impartial conduct standards? That's a label from the Department of Labor. It has meaning, though. You have to act with a duty of care, sort of thing of a fiduciary duty, and a duty of loyalty. Similarly, a fiduciary duty. You can't put your interest ahead of the investors. No more than reasonable compensation relative to the services provided, no materially misleading statements. There is a group of things like that that are called the impartial conduct standards.” – Fred Reish