Benefits and executive compensation partner Fred Reish spoke to Financial Advisor Magazine about how the Department of Labor (DOL) is poised to give advisory firms more time to comply with its fiduciary rule. The DOL currently has a nonenforcement policy toward Prohibited Transaction Exemption (PTE) 2020-02, which is set to expire on Dec. 20 when the new rule goes into effect.
Reish told the publication, “The word on the street is that the extension of the nonenforcement policy will be for 60 to 90 days. That would provide additional time, from Dec. 20 to February or March.”
“I am hearing that one of the reasons for the extension is to allow data providers more time to develop their systems to provide plan information to financial institutions for purposes of evaluating rollovers,” Reish said. “In terms of relief, the largest financial institutions are making good progress toward the Dec. 20 deadline,” he continued, “but, of course, additional time is always welcome.”
“The mid-market is not as far along,” Reish noted, “so the additional time will be very helpful to them. That’s also true for some smaller RIAs and broker-dealers, but I am concerned that some smaller firms don’t realize that the new rules will have a material impact on them.” He added, “The extended time limit will only matter for them if they recognize what needs to be done and how much work it is. Hopefully, that will be the case.”