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August 4, 2017

Fred Reish Quoted in ThinkAdvisor on the DOL’s Fiduciary Rule FAQ Guidance

Los Angeles partner Fred Reish was quoted in a ThinkAdvisor article titled “DOL Releases New Fiduciary FAQ on Retirement Plans.” Fred calls the Department of Labor’s recently released FAQ guidance on the fiduciary rule “generally favorable, and pro-business in a way that doesn't harm consumers,” but also warns that “there are traps for the unwary.”

Fred notes that the DOL’s decision, as set out in its FAQs, “to treat advice on contributions as non-fiduciary is helpful to retirement investors. Properly done, that help can be invaluable, and the potential conflicts of interest — and therefore the potential for bad advice about contributions — are very limited.” He adds that this stance is “a reversal of the DOL’s prior position on this issue.”

As to the part of the guidance that discusses notifying plan sponsors of fiduciary status, Fred notes that “the issue is a little more complicated.”

“There probably isn’t much potential damage to plans if they don’t know — for a limited time period — that their advisor is a fiduciary. And there certainly is a temporary saving of effort and money in delaying the notice. Also, for broker-dealers there is the possibility that the final rules will have a seller’s exception so that, in some cases, the broker-dealer would not ultimately be a fiduciary. In that case, multiple conflicting notices could result in confusion.”

Read “DOL Releases New Fiduciary FAQ on Retirement Plans.”

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