DOL Fiduciary Rule: 

Impact to your business hiring

The DOL Fiduciary Rule has been the topic of much discussion and a great deal of heated debate as to its impact on the business.  If you’re in the industry, you’re likely to see the impact soon, especially in areas such as compliance, IT, sales/marketing and audit.

In short, the Fiduciary Rule is to protect retirement savers and expanding the definition of who is considered a fiduciary by providing a minimum level of legal accountability to the customer. As a result, many more employees will likely be needed to tackle this regulation.

The rule expands the “investment advice fiduciary” definition under the Employee Retirement Income Security Act of 1974 (ERISA).

Those involved will need to understand the breadth and depth of the new requirement under this rule.  For example, one such requirement will be up front disclosure of any fee associated with any investment a client uses as a vehicle for retirement savings.

Firms anticipating the implementation of the rule, which need to meet full compliance January 2018, will need to increase resources in their legal and compliance departments.  Legal teams on the sales, as well as investment side, have needed to interpret what it means to perform in the “best interest” of the client according to the new rule. This includes evaluating existing marketing campaigns, agreements with clients, and other documents and policies to ensure they are in compliance and “void of misleading statements” per the new requirements.

Funds, basis points, compensation plans and other areas need to be reworked and new disclosures created to ensure fiduciaries are receiving no more than “reasonable compensation”.  New policies to make proper disclosure to clients about conflicts of interest will need to be put into place.

Finally, it will involve the implementation of new systems to carefully track interactions between fiduciaries and clients.  The impact will include staffing up to implement these new systems, train fiduciaries on their responsibilities with new systems, create new disclosure paperwork, and more to come.

Whatever you’re facing in the wake of this major regulatory change, Oakwood has the expertise to find temporary or permanent staff you need to successfully navigate compliance requirements of the DOL Fiduciary Rule and get you ready by January 2018.