The contest in our industry is the battle over the Department of Labor’s proposal for defining “fiduciary” in the context of retirement plan accounts and IRAs. In question is: under what circumstances will a financial advisor, investment advisor, or broker, be considered a fiduciary, with all of the responsibilities and the duty of care that entails?
We have seen these same opposing forces arrayed against one another on this stage before. In October of 2010, DOL’s Employee Benefits Security Administration (EBSA) issued proposed fiduciary definition regulations. This guidance expanded the fiduciary definition beyond the so-called “five-part test” that has been in effect for some 40 years. Certain advising relationships that might not have been considered “fiduciary” under the old regulations, now would be.