Once the new fiduciary rule is
in effect, many advisors who
previously were not subject to
fiduciary standards, will find
themselves subject to these
higher requirements. In order
to determine to what extent
you will be impacted by
the rule, ask yourself the
following three questions:
1)Are you making a “recommendation?” A recommendation includes advice relating to the advisability of acquiring,
holding, disposing of, or exchanging investments, as well as advice
related to rollovers (discussed in greater depth below).
2)Will you receive any fee or other compensation, whether directly or indirectly?
3)Is your advice being given to a “retirement investor?” According to the fiduciary rule, “Retirement investors
include plan participants and beneficiaries, IRA owners, and
‘retail’ fiduciaries of plans or IRAs (generally persons who hold
or manage less than $50 million in assets, and are not banks,
insurance carriers, registered investment advisors or broker-
dealers), including small plan sponsors.”
If the answer to ALL three of the above questions is yes,
then unless you are specifically exempt from fiduciary status,
you will be subject to the new rules.
There’s no one-size-fits-all template here