Will the new Fiduciary regulations impact your 401(k) Advisor?

You may or may not have heard of the recently announced rules, scheduled to take effect in 2017, that impact retirement plan advisors.  While there is still some uncertainty about how the rules will be implemented and the implementation could vary from firm to firm, what we do know is that the intent or the rule is for retirement plan advisors to act in a fiduciary capacity.  So what is a fiduciary?  A fiduciary is someone that does what is in the best interest of another, regardless of the impact to themselves.  A fiduciary should avoid conflicts of interest.

So what does this mean to you?  It could mean several things:

  1. Your advisor will decide not to become a fiduciary and no longer work with retirement plans,
  2. Your advisor will become a fiduciary and will have to change how they support your plan and how they get paid for their services,
  3. Your advisor is already a fiduciary to your plan and any changes may impact only participant rollover decisions,
  4. Your advisor is already in compliance and nothing changes for you or your participants.

As the plan sponsor, you are responsible for your retirement plan and its compliance with rules and regulations.  The new rules have not taken effect, so here is nothing you have to do at this time, but it could be time to start asking questions of your current providers.  Consider these questions:

  1. Is your current plan consultant a fiduciary to your plan?  If not, will your consultant become a fiduciary when the rules take effect?
  2. Is your plan consultant a retirement plan specialist?
  3. Do you know how your consultant is paid?  Commission? Or Fees?
  4. Does your consultant routinely service your plan through plan reviews and employee engagement?

If you are not sure of the answers, then talk with your consultant.  Be proactive.  Now may be a great time to talk with a Six8 Advisors about a second opinion on your plan.  Our advisors can help you review providers, fees and expenses.  We can evaluate the services provided, and your responsibilities as the plan sponsor and fiduciary.

You can learn more about the new rules here:

Access the DOL Filings on April 6, 2016, with the U.S. Federal Register online.

Review the The DOL Conflicts of Interest Rule online.




NOTE: The ideas and information shared above are general in nature and provided for informational purposes only.  The accuracy, completeness, and timeliness of the information cannot be guaranteed.  The information contained herein is not intended to render tax, legal or investment advice.