This action means that the DOL Fiduciary Rule is no longer applicable, and the rules under the Employee Retirement Income Security Act (“ERISA”) for determining fiduciary investment advisor (i.e., the “Five-Part Test” from 1975) and the related exemptions that were in effect prior to the issuance of the DOL Fiduciary Rule will now apply. It is uncertain whether the DOL will issue any further guidance or clarification for investment advice fiduciaries. Now, the focus will be on the Securities and Exchange Commission (SEC) “best interest” proposals, issued on April 18, 2018, which seek to establish a “best interest” standard of conduct for broker-dealers when making recommendations to retail investors, clarify the fiduciary standard for investment advisers, and require a relationship summary to be provided to retail customers.
Please consult with legal counsel prior to ceasing any new activities or procedures undertaken in response to the DOL Fiduciary Rule. At a minimum, in most cases, formal action should be taken to rescind any impartial conduct standard policies or other policies adopted in light of the DOL Fiduciary Rule before ceasing any actions mandated by such policies.
We will continue to monitor additional developments.
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