Happy Friday Indeed! As I have explained with this roller coaster of a pending rule that we have been anticipating, I am concerned about client confusion with the DOL Rule's will it/won't it go into effect issue. As I mentioned previously, we made the decision as a firm to wait to see how the DOL Rule shakes out before sending out the negative consent letters regarding the Best Interest Contract to your brokerage clients. Well, guess what, we are not the only ones who are taking this same stance. The DOL is receiving comment letters stating the same concerns with client confusion and the DOL is taking action because it is also concerned about client confusion and marketplace disruptions with the possible delay in the Rule.
The DOL issued today a Field Assistance Bulletin [https://www.dol.gov/sites/default/files/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2017-01.pdf]
that provides us some temporary enforcement relief due to the uncertainty of the applicability date of the fiduciary duty rule.
The gist of it is two fold and it is letting me breathe a little easier with the decision to hold off on sending the negative consent letter out:
1) If the DOL issues a final rule after April 10, 2017 (i.e. a delay to the rule occurs), it will not initiate enforcement action against us if we did
not satisfy the conditions of the rule (i.e. send out the negative consent letters on or before April 10, 2017). However, we will still need to send
the letters out if the rule is only delayed and the BIC portion is still included.
2) If no delay is issued, an enforcement action will not be initiated if the negative consent letter does not go out on or before April 10, 2017. We
will have to send the letters out within a reasonable period (this is a subjective time period - but a 30 day period would be appropriate between
effective and time to send letters).
I hope everyone has a great weekend. I am definitely going to sleep a little better tonight. I will be out of the office on Monday (college visit with
my son @ Butler), but will try to respond if I am able.
If you have questions about DOL Rule, just let me know and I will be happy to talk it through with you. Thanks, Renee