UPDATE ON THE UNIFORM FIDUCIARY STANDARD
The first quarter of 2015 involved some major developments on the topic of uniform fiduciary standard, including FINRA’s regulatory guidance, President Obama’s public comments, Mary Jo White’s first public declaration in favor of a uniform fiduciary standard, and the Department of Labor’s release of its new definition of a “fiduciary” under ERISA. This article will address these recent developments and their anticipated impact. One development of note is the Department of Labor releasing its Notice of Proposed Rulemaking. According to the DOL, the new rule is designed to require the best interest standard across a broader range of retirement advice with a particular focus on advice provided to self-directed IRAs and 401(k)s. Under DOL’s proposed definition, any individual receiving compensation for providing advice that is individualized or specifically directed to a particular plan sponsor (e.g., an employer with a retirement plan), plan participant, or IRA owner for consideration in making a retirement investment decision is a fiduciary. Interestingly, a fiduciary could be a broker, registered investment adviser, insurance agent, or other adviser. And being a fiduciary simply means that the adviser must provide impartial advice in their client’s best interest.