webinar brought to you by. the evolving erisa fiduciary standard what do you need to know? live...
TRANSCRIPT
Webinar brought to you by
The Evolving ERISA Fiduciary Standard What Do You Need To Know?
Live ByAllAccounts Webinar - Feb 28, 2PM EST
Presented by
Marcia S. Wagner, Esq.
ByAllAccounts is the only provider of intelligent data aggregation for financial services companies and the platforms on which their businesses depend.
We serve over 1500 clients, including Advisory firms, Wealth managers, Trusts and Asset managers.
We help clients:
•Eliminate Manual Data Entry•Drive Back Office Efficiency•Access Hard-to-Get Account Data (retirement accounts)•Provide Holistic View of Client Portfolios•Save Time & Money
About ByAllAccounts
Marcia S. Wagner, Principal – Wagner Law
•Principal of The Wagner Law Group, one of the nation’s largest boutique law firms, specializing in ERISA, employee benefits and executive compensation
•Frequently quoted in The Wall Street Journal, Financial Times, Pension & Investments, many other industry publications
•Provides counsel to advisors
Webinar brought to you by
The Evolving The Evolving ERISA Fiduciary Standard ERISA Fiduciary Standard
What Do You Need To Know?What Do You Need To Know?
Marcia S. Wagner, Esq.
Webinar brought to you by 6
DOL’s Campaign to Expose ConflictsDOL Strategy
◦ Roll out new fee disclosure rules.◦ Impose fiduciary status on more providers.◦ Force non-fiduciary advisors to make disclaimers.
DOL releases proposed reg’s on Oct. 21, 2010.◦ Broadens “investment advice fiduciary” definition.◦ Withdrawn on September 19, 2011.◦ To be re-proposed with more input from public.
If you provide investment advice, you are automatically deemed a fiduciary.
DOL’s current definition for investment advice is based on 5-factor test.
Webinar brought to you by 7
Overview of DOL’s Initial Proposal
Existing Definition◦ Advice may be investment advice if it is a primary
basis for plan decisions and given on regular basis.
DOL’s Initial Proposal◦ Include any advice that may be considered by plan.◦ May include casual advice or one-time advice.◦ Non-fiduciary advisors must make disclaimer: (1) advisor is acting as seller of securities. (2) advisor’s interests are adverse to client. (3) advice is not impartial.
Webinar brought to you by 8
Broader “Fiduciary” DefinitionPractical Implications
Non-Fiduciary Advisors◦ Would need to change service model.◦ Must disclose they are not providing impartial
advice.◦ Or they could accept fiduciary status and become
subject to ERISA.
Re-proposed Rule in 2012◦ New definition to include individualized advice only.◦ Will be similar in approach to DOL’s initial proposal.◦ DOL is coordinating with SEC.
Webinar brought to you by
Broader “Fiduciary” DefinitionPractical Implications
DOL proposal likely to pressure advisors to provide fiduciary services for level fees.◦ Advisors unwilling to serve plan clients on these terms
may be forced out of retirement space.
Advisors, especially non-fiduciaries, should re-evaluate business model for plan clients.◦ Explore working with recordkeeping platforms that have
ability to offer level payouts.◦ Explore use of ERISA fee recapture accounts to ensure
advisor retains level fee only.◦ Consider becoming “dual registrant” and charge level
asset-based fee as RIA.◦ No easy “one size fits all” solution for firms.
9
Webinar brought to you by
TO DO
Speak with recordkeeping platforms regarding potential fee leveling
Explore certain computer models under which investment advice may be provided while the financial advisor still receives variable compensation
Review contracts with clients to ensure no inadvertent prohibited transactions and clarify on what you are and more importantly, are not a fiduciary for
Develop relationship with ERISA/employee benefits counsel – realistically you probably need some assistance in this complex area – not something to do on your own, cost is not prohibitive: $2,000 to a few thousand dollars per year.
10
Webinar brought to you by 11
The Evolving ERISA Fiduciary Standard
Presented by
Marcia S. Wagner, Esq.
99 Summer Street, 13th FloorBoston, MA 02110
Tel: (617) 357-5200 Fax: (617) 357-5250 Website: www.wagnerlawgroup.com
A0091772
Q&A
CONTACT ByAllAccounts for 10-minute complimentary
phone consultation:
Jhan FriasByAllAccounts
Office: (781) 376-0801 ext. 129Mobile: (401) 780-7119
Thank you!