Attention to Fiduciary Status Matters — Regardless of Rule Delay

The Department of Labor’s (DOL) fiduciary rule could be on hold. But no matter what its fate — applied at last or on hold — it is and will be no less important to be mindful of fiduciary status.

In “While We Wait: The Current Fiduciary Rule and Annuities,” a recent posting in his “Interesting Angles on the DOL’s Fiduciary Rule” series, Fred Reish cautions that it would be a mistake to think that just because the rule may be delayed means that the industry is “rule-less.” Says Reish, “the ‘old’ rule, and exemptions, which have been place for decades, will continue to apply.”

Not only that, the genie is out of the bottle, Reish argues: “Over the past few years, a tremendous amount of attention has been paid to the meaning and consequences of being a fiduciary . . . and I doubt that we can walk back from that.” And that scrutiny, he says, means that “many common practices” will result one being considered a fiduciary, even under the old — translation, current — rule.

“The consequences of unknowingly being a fiduciary,” Reish warns, “are significant.” And that should be kept in mind, he argues, even if one “heaves a sigh of relief for the delay of the fiduciary rule.”