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DOL Fiduciary Duty Rule: Resources and Next Steps

By May 24, 2017No Comments

Members and Friends –

As you know, the Department of Labor has decided to not postpone the implementation date of the Fiduciary Duty Rule, which will take effect as scheduled on June 9. The Best Interest Contract Exemption will not take effect until January 1, 2018. For insight and analysis, please review Cowen Washington Research Group’s Macro Commentary: Fiduciary Duty – Evaluating Options Once Rule Takes Effect on June 9.

Throughout the DOL’s rulemaking process, the IPA worked to ensure that the final rule supports investor choice and addresses the business needs of our membership. We successfully argued that the original Asset List should be removed, protecting REITs and BDCs as acceptable assets that can be sold under the new rule. The fact that these offerings can be sold under the final rule has not changed. Given that the rule as written will be effective on June 9th, IPA members should be comfortable knowing they can include these portfolio diversifying investments in their client’s portfolios.

When announcing that the Fiduciary Duty Rule would be effective on June 9, Labor Secretary Alexander Acosta made it clear that they want to work with industry to improve the rule going forward. The IPA is engaged and will work proactively with our coalition partners and the DOL on improvements to the rule so that our products remain available for all investors.

Although we are encouraged that our members can continue offering these investments, the IPA will continue to aggressively pursue our member’s interests throughout this process, and will communicate our plans in the days and weeks ahead.

Thank you,

Anthony Chereso
President and Chief Executive Officer
Investment Program Association