WASHINGTON—The Department of Labor published 34 questions and answers last week meant to clarify important aspects of its fiduciary duty rule. The FAQs are based on feedback and misunderstandings it has received from the financial services industry and others.
The Department of Labor’s rule was finalized in April. It will affect how financial advisers may advise clients on retirement savings and hold advisers to a “fiduciary standard,” NAFCU explained.
“The rule can be triggered for any credit union whose activities equate to providing fiduciary investment advice under federal statute. The revised definition of fiduciary advice and the best-interest contract portion of the rule will take effect in April 2017; the rest of the rule will go into effect Jan. 1, 2018,” NAFCU reported.
The Department of Labor’s FAQ document addresses the following questions, among others:
- How will the Department of Labor approach implementation of the new rule and exemptions during the period when financial institutions and advisers are coming into compliance?
- Is “robo-advice” covered by the best-interest contract exemption or other exemption?
- When do firms and their advisers have to comply with the conditions of the new best-interest contract exemption and principal transactions exemption?
- When do firms and their advisers have to comply with the new conditions in pre-existing exemptions that were amended in connection with the rule?