The Department of Labor on April 14 released a proposed rule to impose a fiduciary duty on all retirement savings advisers.
The proposal would apply to all advisers providing advice that is individualized or specifically directed to a particular plan sponsor, plan participant or IRA owner with regard to any retirement savings decision. Under the proposed rule, advisers and clients would be required to enter into “best interests contracts” committing advisers to: putting the clients’ best interests first; adopting policies and procedures to mitigate conflicts of interest; clearly and prominently disclosing conflicts and fees and “directing the customer to a web page disclosing all compensation arrangements entered into by the adviser and firm.”
The proposed rule would still permit certain fee-based transactions for certain assets “commonly purchased” for retirement accounts. These include exchange-traded REITs, but not public non-listed REITs (RNLRs).
Several organizations representing stakeholders in the asset management sector are expected to join a request for an extension of the 75-day comment period for the proposal.
(Contact: Victoria Rostow at vrostow@narteit.com)