The retirement planning industry is about to see an influx of fiduciaries later this year thanks to the Department of Labor’s proposed rule. Retirement plan advisors have an opportunity here to set themselves apart from the rest.
Jason Roberts, founder and chief executive officer at Pension Resource Institute, urged advisors to emphasize other services provided to plan sponsor clients as new competition enters the market during a panel at the Viking Cove Institute’s Industry Leaders Summit this weekend. “There will be more fiduciaries out there,” he stated. “It’s time to highlight those things that new fiduciaries cannot learn in a weekend.” This includes administrative tasks that aid clients, like helping employers monitor and select service providers, he said.
Bonnie Treichel, ERISA attorney and founder of retirement plan advisor consulting firm Endeavor Retirement and law practice Endeavor Law, also touched on action items for plan advisors to follow before the finalized rule is released.
Specifically, Treichel recommended advisors review the proposed amendments to prohibited transaction exemption (PTE) 2020-02. According to the Federal Register, the proposed amendment would provide additional protections for ERISA plans and additional clarity for investment advice fiduciaries seeking to receive compensation for their advice.
Under these added protections, advisors would have to provide additional disclosures to their clients and would be subject to changes under PTE 2020-02’s exclusion and eligibility requirements, among other revisions.
Plan advisors should also consider helping their clients evaluate any service changes from providers, like recordkeepers. “Help your plan sponsor clients because they won’t think of good points after that final rule is made,” she added.
While panelists noted that most rule changes won’t occur at the plan level, its best to understand what parties are likely to be considered as fiduciaries come May or June, such as service providers, insurance agents, and wealth managers, among potential others.
SEE ALSO:
- Fiduciary Rule May Curtail Wealth Managers Pursuing Retirement Planning
- Congress Voicing Concerns with DOL Fiduciary Rule Proposal
- Fiduciary Rule Comment Letters Flood in to DOL as Deadline Passes
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
