The US Department of Labor has released its package of proposed changes to the regulation defining fiduciary advice and to the exemptions for conflicts and compensation for investment advice to plans, participants (including...more
11/3/2023
/ Banks ,
Best Interest Standard ,
Broker-Dealer ,
Department of Labor (DOL) ,
Fiduciary Duty ,
Fiduciary Rule ,
Individual Retirement Account (IRA) ,
Investment ,
Investment Adviser ,
Investment Management ,
Investment Trust Companies ,
IRA Rollovers ,
New Rules ,
PTEs ,
Regulatory Agenda ,
Regulatory Reform ,
Regulatory Requirements ,
Retirement Plan
The SEC Division of Examinations recently released its 2024 Examination Priorities (2024-exam-priorities.pdf (sec.gov)). While the Priorities cover a range issues, this article focuses on the Priorities that could impact...more
10/24/2023
/ Broker-Dealer ,
Department of Labor (DOL) ,
Disclosure ,
Employee Benefits ,
Fund Managers ,
Individual Retirement Account (IRA) ,
Investment Adviser ,
Investors ,
IRA Rollovers ,
Retirement Plan ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
UPDATE: On August 8, I posted this blog article in contemplation of the DOL sending a new fiduciary proposal package to the Office of Management & Budget (OMB) in the White House. One month later, to the day, the receipt of...more
9/26/2023
/ Annuities ,
Best Interest Standard ,
Department of Labor (DOL) ,
Employee Retirement Income Security Act (ERISA) ,
Exemptions ,
Fiduciary Duty ,
Fiduciary Rule ,
Individual Retirement Account (IRA) ,
IRA Rollovers ,
New Regulations ,
New Rules ,
OMB ,
Prohibited Transactions ,
PTEs ,
Regulatory Agenda
Beneficiaries of qualified tuition programs under Section 529 of the Internal Revenue Code (“529 accounts”) will have a new opportunity starting January 1, 2024. Under SECURE Act 2.0 (the “Act”), 529 account beneficiaries...more
9/12/2023
/ 529 Plans ,
Beneficiaries ,
Broker-Dealer ,
Individual Retirement Account (IRA) ,
Investment Adviser ,
IRA Rollovers ,
Registered Investment Advisors ,
Retirement Plan ,
Roth IRA ,
SECURE Act ,
Tax Planning
The DOL has not appealed the decision in the Florida Federal District Court that vacated its fiduciary “re-interpretation.” That re-interpretation, in effect, said that ongoing investment advice to a rollover IRA could be...more
8/8/2023
/ Annuities ,
Benefit Plan Sponsors ,
Best Interest Contract Exemptions ,
Best Interest Standard ,
Department of Labor (DOL) ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Individual Retirement Account (IRA) ,
OMB ,
Prohibited Transactions ,
PTEs ,
Retirement Plan
The President signed the Consolidated Appropriations Act, which included SECURE Act 2.0, on December 29, 2022.
SECURE Act 2.0 has over 90 provisions, some major and some minor; some mandatory and some optional; some...more
In 2020, the Department of Labor (DOL) issued its Prohibited Transaction Exemption (PTE) 2020-02 to provide an exemption to most prohibited transactions resulting from nondiscretionary fiduciary advice to retirement plans...more
5/30/2023
/ Appeals ,
Department of Labor (DOL) ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary ,
Florida ,
Individual Retirement Account (IRA) ,
Internal Revenue Code (IRC) ,
IRA Rollovers ,
IRS ,
PTEs ,
Retirement Plan ,
State and Local Government
Most employees who work for large and mid-sized employers have the opportunity to defer money from their paychecks into a savings-based retirement plan. That is not the case with many small employers, though, where large...more
Starting with tax years beginning after December 31, 2022, a small employer can take advantage of significant tax credits under SECURE Act 2.0 (the “Act”) for establishing a new retirement plan. Under the Act, the tax...more
The Broker-Dealer Regulation & Litigation Digest is a periodic compilation of the most read blog posts published on the Broker-Dealer Law Blog during the last few months. Here you can catch up on what you missed or re-read...more
The President signed the Consolidated Appropriations Act, which included SECURE Act 2.0, on December 29, 2022.
SECURE Act 2.0 has over 90 provisions, some major and some minor; some mandatory and some optional; some...more
3/14/2023
/ Business Expenses ,
Defined Contribution Plans ,
Department of Labor (DOL) ,
Employee Benefits ,
Employee Contributions ,
Employer Contributions ,
Individual Retirement Account (IRA) ,
IRS ,
Retirement Plan ,
SECURE Act ,
Small Employers ,
Startups ,
Tax Credits
The current DOL fiduciary rule says that a broker-dealer and its registered representatives (advisors) are fiduciaries to a plan under ERISA if a functional 5-part test is satisfied. This same 5-part test applies to...more
2/22/2023
/ Broker-Dealer ,
Department of Labor (DOL) ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Fiduciary Rule ,
Individual Retirement Account (IRA) ,
Internal Revenue Code (IRC) ,
Investment Adviser ,
IRA Rollovers ,
Proposed Amendments ,
Proposed Regulation ,
PTEs ,
Regulatory Agenda ,
Retirement Plan
The President signed the Consolidated Appropriations Act, which included SECURE Act 2.0, on December 29, 2022. SECURE Act 2.0 has over 90 provisions, some major and some minor; some mandatory and some optional; some...more
Registered investment advisers, including dual registrant broker-dealers (collectively “advisers”) who provide discretionary investment management services to individual retirement accounts (IRAs), are fiduciaries under the...more
1/17/2023
/ Broker-Dealer ,
Conflicts of Interest ,
Fees ,
Fiduciary Duty ,
Individual Retirement Account (IRA) ,
Internal Revenue Code (IRC) ,
Investment Adviser ,
Investment Management ,
IRS ,
Retirement Plan ,
Standard of Care
Both the Internal Revenue Code (Code) and the Employee Retirement Income Security Act of 1974 (ERISA) include prohibited transaction provisions that literally prohibit certain transactions (unless exempted by statute or by a...more
The Department of Labor considers a rollover recommendation to be a recommendation to liquidate the investments in a participant’s 401(k) account or to transfer (and change) securities.
In addition, as explained in...more
The SEC and the DOL have separately issued guidance on rollover recommendations – however, a close examination indicates that the guidance by both agencies is very similar. The SEC’s guidance for broker-dealers is in...more
The DOL’s expanded definition of fiduciary advice is explained in the preamble to PTE 2020-02.
When conflicted fiduciary advice is given to retirement investors, that is, retirement plans, participants (including...more
The DOL’s expanded definition of fiduciary advice is explained in the preamble to PTE 2020-02. When conflicted fiduciary advice is given to retirement investors (that is, retirement plans, participants (including rollovers),...more
8/9/2022
/ Best Interest Standard ,
Broker-Dealer ,
Department of Labor (DOL) ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Financial Institutions ,
Individual Retirement Account (IRA) ,
Internal Revenue Code (IRC) ,
Investment Adviser ,
IRA Rollovers ,
Prohibited Transactions ,
PTEs
The DOL’s expanded definition of fiduciary advice to retirement plans, participants, and IRAs was described in the preamble to PTE 2020-02. The PTE then provides relief for conflicted non-discretionary recommendations to...more
The DOL’s expanded definition of fiduciary advice is described in the preamble to PTE 2020-02. When conflicted fiduciary advice is given to retirement investors (that is, retirement plans, participants (including rollovers),...more
7/28/2022
/ Best Interest Standard ,
Broker-Dealer ,
Department of Labor (DOL) ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Financial Institutions ,
Individual Retirement Account (IRA) ,
Internal Revenue Code (IRC) ,
Investment Adviser ,
IRA Rollovers ,
Prohibited Transactions ,
Retirement Plan ,
Securities and Exchange Commission (SEC)
The DOL’s prohibited transaction exemption (PTE) 2020-02 (Improving Investment Advice for Workers & Retirees), allows broker-dealers and their registered representatives (advisors) to receive conflicted compensation resulting...more
7/27/2022
/ Best Interest Standard ,
Broker-Dealer ,
Compensation ,
Compliance ,
Conflicts of Interest ,
Department of Labor (DOL) ,
Employee Retirement Income Security Act (ERISA) ,
Exemptions ,
Financial Institutions ,
Individual Retirement Account (IRA) ,
Investors ,
Mitigation ,
Prohibited Transactions ,
Retirement
The DOL’s expanded interpretation of fiduciary advice is described in the preamble to Prohibited Transaction Exemption (PTE) 2020-02. The expanded interpretation applies to all rollover recommendations, including...more
7/12/2022
/ Best Interest Standard ,
Broker-Dealer ,
Department of Labor (DOL) ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Financial Institutions ,
Individual Retirement Account (IRA) ,
Investment Adviser ,
IRA Rollovers ,
Prohibited Transactions ,
Retirement Plan
The DOL’s expanded interpretation of fiduciary advice is described in the preamble to Prohibited Transaction Exemption (PTE) 2020-02. When conflicted fiduciary advice is given to retirement investors (that is, retirement...more
7/6/2022
/ Best Interest Standard ,
Broker-Dealer ,
Department of Labor (DOL) ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Financial Institutions ,
Individual Retirement Account (IRA) ,
Investment Adviser ,
IRA Rollovers ,
Prohibited Transactions ,
Retirement Plan
The DOL’s expanded definition of fiduciary advice is described in the preamble to PTE 2020-02.
When conflicted fiduciary advice is given to retirement investors (that is, retirement plans, participants (including...more
6/22/2022
/ Best Interest Standard ,
Broker-Dealer ,
Department of Labor (DOL) ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Financial Institutions ,
Individual Retirement Account (IRA) ,
Investment Adviser ,
IRA Rollovers ,
Prohibited Transactions ,
Retirement Plan ,
Securities and Exchange Commission (SEC)