The new fiduciary standard’s effect on customer experience
October 7, 2016 by Andrew Hellard
Recently, the U.S. Department of Labor (DOL) finalized a new standard broadening the definition of who constitutes a “fiduciary” under the Employee Retirement Income Security Act (ERISA).
This controversial move is causing insurance and other financial services brokers to rethink their business models as well as the way they communicate with their customers.
Before the new rule, which has an applicability date of April 10, 2017, financial advisors for 401(k) plans and IRAs who are considered “brokers,” defined as registered representatives of a broker dealer paid commissions by the investments they recommend, have been held to a “suitability” standard when it comes to the duty they owe clients.
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