The ruling was in response to President Obama’s request for changes in regulatory oversight of retirement investing after the financial crisis of 2008. In particular, the Obama administration was concerned about potential predatory practices with elderly investors and their life savings. Understanding and complying with this rule is critical to all participants in the wealth management and insurance industry in order for you to retain wallet share and market share. Download White Paper »
Understand the basics
Here are the important things you need to know about the ruling:
• Who’s affected? Those who provide investment advice and sell investment products and services related to employee benefit plans and retirement accounts. The rule expands the definition of Fiduciary in this context, so the bulk of the impact falls not only on financial advisers and investment representatives per se, but also primarily on plan sponsors, funds, and producers who provide incentives and commissions to advisors.
• What’s changed? Advisors and sponsors of retirement accounts and employee benefit plans must adhere to an expanded fiduciary standard of putting their clients’ best interests before their own profits and incentives.
• What’s the impact? Potentially far-reaching effects spanning business, compliance, operations, and technology. Of particular note, disclosure requirements are significantly enhanced.
• How should firms respond? If you haven’t begun planning and preparing to meet upcoming deadlines, start now.
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