DOL Publishes Second Round of Fiduciary Rule FAQs

The Labor Department today released a second set of frequently asked questions on its final rule redefining who counts as a fiduciary under the Employee Retirement Income Security Act and Internal Revenue Code. The FAQs address questions received by DOL from the industry since the rule was issued, and are intended to offer additional clarity about the rule and what institutions must do to comply. Specific areas of focus include exemptions regarding investment recommendations, investment education, general communications, independent fiduciaries and platform providers.

After sustained advocacy by ABA, DOL in questions 1 and 12 clarified that providing educational information to IRA and retirement customers about investment alternatives — such as product features, returns and fees (for example, bank CD rate sheets) — would not be considered “investment advice,” provided that the bank did not make a specific recommendation to the customer. In addition, DOL concluded in question 34 that it would also not trigger fiduciary status if a bank were to offer an automated daily cash sweep service to its clients (including IRA owners) that — at the customer’s direction — automatically sweeps uninvested cash from the customer’s account into a short-term investment vehicle on a daily basis. For more information, contact ABA’s Tim Keehan.


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