February 15, 2017

Fiduciary Advice Rules Under Review (article)

The investment advice rules issued by the Department of Labor’s Employee Benefits Security Administration (EBSA) were to become applicable on April 10, 2017 (see the May and December 2016 editions of our At Issue newsletters).   These rules, sometimes referred to as the ‘fiduciary advice rules’, impose fiduciary standards on certain investment advisers. The goal of these rules is to ensure that the best interest of the individual is maintained and that no conflicting investment advice is given.  Plans subject to the fiduciary advice rules include pension plans subject to ERISA, health savings accounts, Archer medical savings accounts, Coverdell Education Savings Accounts and individual retirement accounts (IRAs).  In a nutshell, the rules attempt to regulate individuals deemed to render investment advice when the advice is given for a fee or other direct or indirect compensation, and such advice entails recommendations relating securities or other investment property.


On February 3, 2017, President Trump issued a Memorandum directing the Secretary of Labor to prepare an updated economic and legal analysis concerning the likely impact of these rules.  Any proposed changes derived from this review, which could potentially rescind or revise the current fiduciary advice rules, would then undergo a regulatory review process, referred to as a notice and comment period.  While this directive does not specifically delay the implementation date of these rules, it is unclear at this point what changes, if any, would be made by the Department of Labor and accepted by the Executive Branch.  We will continue to provide updates on this matter as they become available.   


The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.  

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