The Department of Labor’s Conflict of Interest rule is
anticipated to thrust advisers in the retirement services industry into an
unprecedented regulatory space. With its April 10 implementation just months
away, advisers are developing and seeking new strategies to comply with the
To make tasks simpler, firms this past year have unleashed
a wave of new tools, platforms and services to help advisers remain compliant ahead
of the rule. These products help with various tasks including evaluating fund
lineups, reexamining compensation practices, and documenting all these efforts
to ensure proper disclosure and the mitigation of any conflicts of interest.
In this post, PLANADVISER will revisit some of these
With the wave of ERISA-related
litigation seen this year, it’s not surprising that reevaluating fee
structure is among the top of the list when it comes to preparing for the DOL
rule, which extends fiduciary responsibility to virtually anyone offering
investment advice in a retirement plan.
Financial Solutions recently released a suite of compliance-focused tools including
the DOL Fiduciary Solution which was designed to help advisers make investment
decisions that meet fiduciary standards, by allowing them to evaluate whether
funds and share classes on broker/dealer and other distributor platforms are
appropriate for certain clients.
The financial-technology company RiXtrema
recently released FeeComp, a tool that will allow advisers to benchmark fee
structures against others based on several factors including account size,
geography and services offered, to prove they’re working in clients’ best
interests. The SEI Advisor Network and Redtial collaborated to create the DOL
Workflow Toolkit, which addresses several compliance tasks including switching
from commission-based to fee-based investments.
Being able to accurately document steps taken to avoid
conflicts of interest is also crucial. To help meet these needs, the firm fi360
launched the Fiduciary Focus Toolkit which helps advisers “adopt and create
investment policy statements, investment watch-list criteria, client monitoring
reports and other essential fiduciary-related activities,” the firm says.
Financial Systems released the DOL Advisor Toolkit which offers various services
including account reviews and assessments, documentation and audit trails as
well as the distribution of best interest contract (BIC) disclosures, automated
compliance actions, and more.
The investment consulting firm AssetMark
released a new assessment tool which uses a series of strategic questions
about compensation and compliance to generate a preparedness level. It’s a component
of AssetMark’s DOL Readiness Campaign, which offers advisers a variety of
resources to help comply with the rule.
In addition, the fiduciary rule will also affect how
funds from ERISA-governed retirement accounts are rolled over into individual
retirement accounts (IRAs). To simplify this process, PCS released its rollover
tool which the firm says is fully DOL complaint and helps transition
existing IRAs from commission-based to fee-based arrangements.
Of course, the future
of the fiduciary rule has been placed on heightened scrutiny following the
victory of President-elect Donald J. Trump. His pick for DOL
Secretary shrouds it in even more uncertainty.
Nonetheless, industry experts argue that any change to
the rule will likely not take effect until after its implementation. They urge
advisers to keep
their minds set on compliance and to take time to ensure whatever platforms
or tools they’ve adopted align with their business before the deadline.
“There is some lag-time programmed into the rule to
ease compliance, but post-April 10 is not the time to learn one’s solution will
not be effective in real practice on the ground,” reads a recent analysis by