On January 13, 2017, the U.S. Department of Labor (the “DOL”) issued the second in a planned three-part set of FAQs on its new fiduciary rule. (For details on the fiduciary rule, see our prior Alert, and for details on the first set of DOL FAQs, see our prior Alert.) The new FAQs focus on the regulation defining “investment advice” and include some important clarifications, including on the independent fiduciary carve-out, cash sweep programs and interactions with plans that will not be treated as investment advice. The DOL also issued a separate FAQ and Questionnaire for consumers. The Consumer FAQ and Questionnaire does not include substantive guidance on the implementation of the rule. However, broker-dealers and other fiduciaries covered under the rule may wish to review the FAQ and Questionnaire in preparation for questions that consumers may ask.
The most notable FAQs, and possible implications and action items for financial institutions, advisors, and asset managers, are described below.
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