In “Biden Fiduciary Definition Moves Could Wrap in Annuities, IRAs,” benefits and executive compensation partners Brad Campbell and Fred Reish spoke to Bloomberg Law about the Department of Labor (DOL) preparing rulemaking to change the fiduciary definition, as well as the regulatory challenges for financial professionals.
The new definition could eliminate the distinction over first-time advice, casting anyone who talks about investment products with plan participants under the fiduciary net, according to Reish.
“A new fiduciary definition could provide that, where there is a relationship of trust between a retirement investor and an insurance agent or a representative of a broker-dealer, one-time advice could be fiduciary advice,” Reish said. “I expect that for all of those fiduciary recommendations, there will be rigorous standards of care, disclosures and mitigation requirements, at the least. That will probably have the greatest effect on advice to individual retirement accounts (IRAs) and on annuity sales.”
Regarding the impact of these regulations, Campbell noted, “We’re looking at change across the board. A lot of us are probably comfortable with the notion that, yes, people ought to be getting really good advice as they make these big decisions. The issue, as always here, is one of compliance difficulty.”
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