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Thursday, October 27, 2016

DOL FAQ's on the Fiduciary Rule

The DOL released today its first round of FAQ's on the fiduciary rule. There will be more analysis and commentary in the coming days, but here are a sampling of questions that will be of interest:

The BIC Exemption provisions regarding Bank Networking Arrangements address referrals by banks and bank employees only to non-affiliated financial institutions such as registered investment advisers, insurance companies or broker dealers. Why isn’t relief provided for referrals to affiliates? Referrals to affiliates who are providers of retail non-deposit investment products therefore generally would not be considered fiduciary investment advice giving rise to a prohibited transaction for which an exemption is required.

Can “insurance-only” agents continue to sell fixed rate and fixed indexed annuities to retirement investors after the applicability date of the Rule? Yes, as long as they comply with "impartial conduct standards."

The wording of PTE 84-24’s reasonable compensation standard differs from the reasonable compensation standard used in the BIC Exemption. Does the Department intend to interpret them differently? The two standards do not differ substantively and the Department intends to interpret these provisions the same way.