By Pamela Wolf, J.D. After years of controversy, including testimony both pro and con in congressional hearings, the Labor Department has finalized its rule addressing conflicts of interest in retirement advice and defining the term “fiduciary” for ERISA purposes. Substantial controversy arose over, among other things, the proposed rule’s “best interest contract exemption,” which would let fiduciary advisers and their firms collect fees not typically permitted to them under existing laws—if they acknowledged their fiduciary status. The 2015 proposal incorporated changes in the DOL’s approach since its failed 2010 proposal and took into account the findings of a report issued by the White House Council of Economic Advisers. The so-called “conflicts of interest” or “fiduciary” rule underwent additional modification to its 2015 proposed version, based on public comments, before reaching its final form, according to the DOL. Still, the final rule, slated for publication in the Federal Register on April 8, will likely continue to draw controversy because of the great waves of change it will bring to the many industries and businesses that will be impacted by its new requirements. And, there remains a substantial question about how well it will dovetail with the SEC’s anticipated rulemaking that would cover some of the same territory. To learn more about the final version of the rule, click here.
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