Plan advisors who already serve in a fiduciary capacity will likely be the least impacted by the new rule. That said, they will need to consider how changes to the fiduciary definition affect the services they provide at the participant level, including assistance with, roll ins, IRA rollovers and investment education generally. There is also a debate concerning how the rule will apply to recommendations advisors provide to plan sponsors regarding the selection of platform providers.
Plan sponsors will also be impacted as the new rule will likely lead to more service providers being considered fiduciaries. Because plan sponsors can be held responsible for the breach of another fiduciary (under ERISA 405), plan advisors are looking to differentiate their services by helping sponsors determine the status of the plan’s service providers and expanding their support relating to assisting with due diligence and monitoring.
Likely the group most impacted by the changes will be individual retirement advisors as they are less experienced operating under a more stringent ERISA fiduciary standard of care. Recommendations concerning investments in IRAs and IRA rollovers will have to be made prudently and documented as being in the clients’ “best interests.”
Jason will describe how “Financial Institutions” are preparing for these changes and answer questions from attendees. At the conclusion of the presentation, he will outline specific action items designed to help advisors prepare for the challenges and take advantage of opportunities created by the new rule.