A letter from Founding Partner, Jim Pratt-Heaney regarding the proposed changes by the United States Department of Labor and their impact on Coastal Bridge Advisors
The Department of Labor has announced that the implementation of the new Fiduciary Rule, which expands the “investment adviser fiduciary” definition under ERISA and places additional restrictions on the provision of investment advice to retirement accounts, would be delayed.
With all of the news and changes since the election, the proposed changes by the Department of Labor to rules financial advisors to ERISA plans and individual retirement accounts (IRAs) must follow have fallen from the spotlight. However, many of you have asked what these changes are all about and whether you, the client, or Coastal Bridge Advisors would be effected.
Among other things, the new rule applies additional and modified restrictions on compensation received by financial advisers meeting the definition of investment adviser fiduciaries, related to their provision of advice to retirement accounts. These restrictions are subject to the Best Interest Contact exemption. To be eligible for the exemption, financial advisors must:
The new rule has caused some large firms to make major changes in commissions and advice, but as you see, we already have the above-described practices as part of our normal operation, so we expect few changes in what we do. Acting as Fiduciaries and trying to be conflict free and transparent is what we do.
*For more on the Fiduciary Rule, turn to President Jeff Fuhrman’s article in Worth Magazine: What is the Standard of Care I Should Expect of my Advisor?