HORAN - Newsroom

Fiduciary Rule Update


As you are aware, in 2016 the Department of Labor (DOL) finalized regulations updating, and expanding, the definition of "fiduciary" in regards to the provision of investment advice. Originally these regulations were set to become applicable in April of this year. The current administration wanted to delay the applicable date to allow the DOL to fully examine the impact of the new rules. As a result the DOL pushed back the applicable date to June 9, 2017. Then, days after his confirmation, Secretary Acosta confirmed that June 9 would be the date the new rules would become applicable. That date has arrived and we have a new operative definition of fiduciary for the financial services industry.

As a fiduciary under the rule, HORAN Retirement Advisors must receive level compensation in connection with covered recommendations unless our engagement falls under an exemption. The DOL continues to make the Best Interest Contract (BIC) exemption available to allow fiduciaries to receive commissions and other forms of non-level compensation.

Importantly, the DOL has limited the requirements of the exemption to adoption and implementation of Impartial Conduct Standards, as defined in the rule.

HORAN Retirement Advisors continues to be proud to serve as a co-fiduciary to your plan and help you navigate the new fiduciary environment with all of your service providers.

In very limited circumstances where HORAN Retirement Advisors might be the recipient of what might be interpreted as non-level compensation HORAN Retirement Advisors will adhere to the Impartial Conduct Standards under the BIC, which means HORAN Retirement Advisors will continue to:

  • Give advice that is in the plan's, and participants', best interest
  • Earn no more than reasonable compensation and
  • Refrain from making materially misleading statements (including omissions) to the retirement plan fiduciaries regarding any recommendations.

Currently, there are no client contracts that need to be signed. Adherence to the Impartial Conduct Standards is sufficient to comply with the BIC exemption at this time.

The compliance date for the remaining requirements of the BIC exemption is effective January 1, 2018. However, the DOL continues to review the rule and exemptions, so further changes are possible.

As more information becomes available HORAN Retirement Advisors will continue to keep you informed. If you have any questions please do not hesitate to contact HORAN Retirement Advisors at 513.745.0707.