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As you are aware, in 2016 the Department of Labor (DOL) finalized regulations updating, and expanding, the definition of “fiduciary” in regards to the provision of investment advice. Originally these regulations were set to become applicable in April of this year. The current administration wanted to delay the applicable date to allow the DOL to fully examine the impact of the new rules. As a result the DOL pushed back the applicable date to June 9th. Then, days after the confirmation of Secretary Acosta he confirmed that June 9th would be the date the new rules would become applicable. That date has arrived and we have a new operative definition of fiduciary for the financial services industry.
As you are likely aware, as a fiduciary under the rule, Everhart Advisors must receive level compensation in connection with covered recommendations unless our engagement falls under an exemption. The DOL continues to make the Best Interest Contract (BIC) exemption available to allow fiduciaries to receive commissions and other forms of non-level compensation.
Importantly, the DOL has limited the requirements of the exemption to adoption and implementation of Impartial Conduct Standards, as defined in the rule.
Everhart Advisors continues to be excited to serve as a co-fiduciary to your plan and help you navigate the new fiduciary environment with all of your service providers.
In very limited circumstances Everhart Advisors may be the recipient of non-level compensation. Full compliance with the BIC exemption, effective January 1, 2018, would require such compensation to be disclosed and agreed to via client contract. However, Everhart Advisors will adhere to the Impartial Conduct Standards under the BIC exemption immediately, which means Everhart Advisors will continue to:
• Give advice that is in the plan’s, and participants’, best interests
• Earn no more than reasonable compensation and
• Refrain from making materially misleading statements (including omissions) to the retirement plan fiduciaries regarding any recommendations.
Effective June 9, 2017 through January 1, 2018, the use of the BIC exemption only mandates adherence to the Impartial Conduct Standards and does not require signed contracts.
The compliance date for the remaining requirements of the BIC exemption are effective January 1, 2018. However, the DOL continues to review the rule and exemptions, so further changes are possible. As more information becomes available Everhart Advisors will continue to keep you informed.
If you have any questions please do not hesitate to contact Everhart Advisors at 614-717-9705.
To remove yourself from this list, or to add a colleague, please email us at sarab@everhartadvisors.com ; 614-717-9705
Securities are offered through Mid Atlantic Capital Corporation (MACC), a registered Broker Dealer, Member FINRA/SIPC. Financial Advice is offered through Everhart Advisors a Registered Investment Adviser. Everhart Advisors is not a subsidiary or control affiliate of MACC.
ACR#244910 06/17
