Tools, Training to Address DOL Fiduciary Definition

It’s not yet a done deal, but DALBAR expects the best interest contract (BIC) exemption in the proposed fiduciary definition by the Department of Labor (DOL) to soon become a reality. As the industry waits to see if and when the definition will be implemented, compensation models are an area of intense scrutiny.

The financial services market research and evaluation firm is rolling out new tools and a self-paced program for advisers to take, to learn what they must do to remain compliant in the face of new regulation if they continue providing advice. Aimed at advisers who work with individual retirement accounts (IRAs) and Employee Retirement Income Security Act (ERISA) plans, the course helps them see best ways to implement the BIC exemption; provides guidance tools for the transition to a new compensation model; examines ways to maintain and increase compensation under the BIC exemption; as well as how to minimize time and cost of compliance. 

Background and an overview of the implications of the BIC exemption are discussed in two free briefs: “BICE Requirements Summary” and “Creating a Successful Best Interest Contract Practice.” The requirements summary lays out the choices that financial advisers must make to comply, remain competitive and profitable in the BICE environment. The practice brief highlights the changes that will be required to meet the obligations and implications of a best interest contract, including: business models, small accounts, business development, marketing communications, risk management and compliance.

“As the regulatory changes under consideration by the Labor Department and IRS [Internal Revenue Service] get closer to reality the discussion must shift to how to operate successfully in the new environment,” says Cory Clark, head of research and due diligence at DALBAR.