IRA

Taking the Guesswork Out of the DOL Fiduciary Rule: Second FAQ Released

February 2, 2017

Luckily for the financial industry, it seems the DOL is trying to take the guesswork out of the Fiduciary Rule by releasing its second set of FAQs.

After looking at the picture below, can you guess which toy is my daughter's favorite? Me neither. Luckily for the financial industry, it seems the Department of Labor (DOL) is trying to take the guesswork out of the Fiduciary Rule by releasing its second set of FAQs.

My daughter is quite the character and has taken a liking to stuffed animals (or as she calls them, her "babies"). She takes every single one of those things EVERYWHERE, and if you ask her which one is her favorite, she will show you a different one each time.

This can obviously be problematic when we're trying to rush out the door and we ask her to pick one toy to take. So we are forced to guess which toy is her "toy of the day" and are inevitably wrong sometimes.

With the most recent DOL FAQ on the Fiduciary Rule, we will hopefully be doing a lot less guessing when it comes to complying with the rule. On January 13, 2017, the DOL released two sets of FAQs related to the rule. One set is aimed at consumers: it makes the case for why we need the rule to protect consumers and explains what they should expect as the rule goes into effect.

The second set of FAQs is "part 2" of the guidance to the industry on compliance with the rule. The 35 questions presented provide guidance on the definitions of "investment recommendations," investment education, general communication, and other exceptions outlined within the final rule.

Similar to my previous blog post that covers the October 2016 FAQ, I won't go into detail about the actual FAQ and its contents, but below is a list of the areas addressed:

  • Investment Recommendations Covered Under the Rule
  • Investment Education Not Considered Investment Recommendations
  • General Communications Not Considered Investment Recommendations
  • Transactions with Independent Fiduciaries with Financial Expertise (i.e., Independent Fiduciary Exception)
  • Marketing Platforms for Individual Account Plans and Providing Assistance in Selection and Monitoring Investment Alternatives

If you would like additional information on the DOL Fiduciary Rule, we wrote several blog posts (please see below) detailing some of the different issues that have surfaced since the rule was finalized. If you have additional questions, please feel free to contact Retirement Strategies Group at (800)722-2333, ext. 3939, or e-mail us at RSG@PacificLife.com.

 

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Picture of Chad Goforth

Chad is currently an Attorney Consultant for the Corporate Law Department at Pacific Life. Previously, he was a Senior Retirement Strategies Consultant, bringing more than 13 years of industry experience to his role and providing technical insights to our sales team and registered representatives on a variety of issues including IRAs, qualified plans, annuities, and estate planning issues.

Pacific Life, its distributors, and respective representatives do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor or attorney.

Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. 

Variable insurance products are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company (Newport Beach, CA) and an affiliate of Pacific Life & Annuity Company. Variable and fixed annuity products are available through licensed third parties.

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