DOL Update: A New Definition of Fiduciary

In 2016, the Department of Labor (DOL) finalized regulations updating, and expanding, the definition of “fiduciary” in regards to the provision of investment advice.

Originally these regulations were set to become applicable in April of this year. However, the current administration wanted to delay the applicable date to allow the DOL to fully examine the impact of the new rules. As a result the DOL pushed back the applicable date to June 9th. Then, days after the confirmation of Secretary Acosta, he confirmed that June 9th would, in fact, be the firm applicability date of the new rules. That date has arrived and we have a new operative definition of fiduciary for the financial services industry.

Impact to Us

The advisors here at Summit Group of Virginia are proud to say that we have served, and continue to serve, as a co-fiduciary to your plan.  We knew it was the right thing to do years before a DOL regulation required it.  We will help navigate this new fiduciary environment with your service providers and are committed to:

  • Giving advice that is in the plan’s and participants’ best interests,
  • Earning no more than reasonable compensation, and
  • Refraining from making materially misleading statements (including omissions) to the retirement plan fiduciaries regarding any recommendations.

Impact to Existing Clients

Currently, there are no client contracts that need to be signed. However, nuances of the Rule may require updates to our agreements in the future. The compliance date for the remaining requirements of the Rule are effective January 1, 2018. However, the DOL continues to review the Rule’s detail and exemptions, so further changes are possible. As more information becomes available, we will continue to keep you informed.

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