On June 9, the US Department of Labor’s (DOL’s) Fiduciary Rule went into effect, broadening the definition of ‘fiduciary’ to include most firms and individuals who provide investment advice to clients. At the same time, exemptions went into effect that allow fiduciaries to engage in compensation practices that would otherwise be prohibited, as long as certain requirements are met, including compliance with the Rule’s “Impartial Conduct Standards”.
Importantly, the DOL has indicated that it will refrain from bringing enforcement action against fiduciaries for violations of the Rule during an implementation period that runs until January 1, 2018—but only if the firm has shown a good faith effort to implement the Rule during that period.
Although some of the exemption requirements will be delayed during the implementation period, the Impartial Conduct Standards apply immediately. Yet many firms have not yet trained their staff and managers on what the Standards are or what would constitute a violation of them.
LEO GRC has been following developments on this Rule closely, and has made eLearning courses available on the Impartial Conduct Standards. The courses are designed to be brief, engaging, and affordable, allowing learners to understand the requirements and firms to document the training as part of their good faith efforts to implement the Rule. Courses are currently available for investment advice providers in general and for those specializing in fixed annuities, with further courses on the Standards and on other Rule requirements forthcoming.