DOL fiduciary rewrite expected as early as tomorrow - watch this space

Viewpoints
October 30, 2023
1 minutes

As reported by Joe Morris at Ignites, the Department of Labor (DOL) is expected to reveal its long-awaited fiduciary rule rewrite, after the prior rule was vacated by the Fifth Circuit. The prior rule had a very significant impact on plan sponsors and asset managers and, while the scope of the new rule is currently a mystery, we can expect it to shake up the plan investment world.

We will be monitoring developments on the new rule closely and will share reactions as soon as possible. In the meantime, major questions include:

  • How will the new rule fit in with Reg BI and other recent guidance on investment advice?
  • Will the new rule blur the line between marketing and advice like the prior rule, or will it broadly exclude public or general communications?
  • Will the new rule permit commission and AUM-based compensation (like the current advice exemption does) or will it discourage certain compensation models?
  • How will the rule impact existing DOL exemptions?  Will we see best interest concepts inserted widely again or will changes be broader in scope?
  • Will the new rule require updates to fund offering materials like the prior rule?
  • Will the new rule require asset managers to obtain consents from existing clients?
  • What kind of grandfathering relief will be available?

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