On September 19, the U.S. Department of Labor (DOL) announced that it will repropose its pending regulation that would amend the definition of what constitutes "investment advice" for purposes of creating fiduciary status under ERISA, rather than proceeding directly to a final regulation. In doing so, DOL is acceding to requests from many interested parties and members of Congress. DOL expects to publish the reproposal in early 2012.

DOL's original proposal, published in October 2010, proved to be very controversial. Its provisions would broaden the scope of who is treated as a fiduciary under ERISA by reason of providing "investment advice." This expansion would be accomplished by eliminating certain factors in the current five-factor test, and making fiduciary status almost automatic for certain types of entities, such as SEC-registered investment advisers, once they give investment recommendations. It also would extend fiduciary status to appraisers of plan assets. While the proposal included several exceptions, there were concerns that these exceptions were too limited to counteract the broad scope of the expanded definition.