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Getting In Shape For Fiduciary Rule With New Checklist

Tom Burroughes

5 October 2017

, a US firm providing risk management tools to firms such as Registered Investment Advisors, has come up with a checklist guide for advisors wrestling with the sweeping changes to how they do business under the Department of Labor’s new fiduciary rule.

The rule, among other features, requires advisors to serve the “best interests” of clients, which in practical form has been taken to mean charging them for advice rather than taking a trail commission fee on products and services sold. The idea is to ensure clients receive advice that actually suits their needs, avoiding potential mis-selling and losses down the line. 

“Every advisor who advises on retirement account assets as of June 9, 2017, is effectively an ERISA fiduciary who must adhere to Impartial Conduct Standard and charge no more than a reasonable fee,” explained RiXtrema President Daniel Satchkov. 

“It’s essential that advisors understand this and take necessary action to comply with the rule,” he said. 

RiXtrema’s DOL Fiduciary Rule Checklist contains seven sections dealing with various requirements of DOL Fiduciary Rule best interest documentation. Each section contains detailed specific questions with references to legislation or DOL FAQ

The new rule states that any rollover (whether level fee or not) is considered to be a “prohibited transaction,” thus any advisor who on-boards Individual Retirement Arrangement assets, since the promulgation of the rule on June 9, 2017, must document why the rollover is in the best interest of the investor. (An IRA rollover is a transfer of funds from a retirement account into a traditional IRA or a Roth IRA.)