On October 27, 2016, the U.S. Department of Labor (the “DOL”) issued the first in a planned three-part set of FAQs on its new fiduciary rule. (For details on the fiduciary rule, see our prior Alert.) The FAQs include some important clarifications, including on the types of variable compensation structures that may be acceptable under the Best Interest Contract (“BIC”) Exemption, advisor recruitment bonuses, plan fee information that will be required to give advice on IRA rollovers, certain requirements related to the BIC website and the use of dividend reinvestment programs for arrangements grandfathered from full BIC Exemption compliance. The DOL also reiterated its intent to require compliance beginning on April 10, 2017.
The most notable FAQs, and possible implications and action items for financial institutions, advisors, and asset managers, are described below.
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