DOL fiduciary adds significant legal liability to producers, panel agrees
April 23, 2024 by John Hilton
SAN ANTONIO — The Department of Labor fiduciary rule proposal has been picked over relentlessly by analysts and industry trade associations since the agency first introduced the concept in 2010.
But that doesn’t mean everyone is prepared for it. In fact, a producer selling a simple life insurance policy could be in for a big surprise if the rule is finalized, said Tom Roberts, principal at Groom Law Group.
Click HERE to read the full story via INN
Wink’s Moore on the Market: “Under this rule, even though you’re selling a product that is not going to be owned by the plan, if you’re having a conversation about the purchase of that product, with a participant who’s going to fund through a distribution, you, congratulations, are a fiduciary.”
The DOL has yet to define what it considers “reasonable compensation.”
Amended several times over the years, PTE 84-24 allows producers to receive commissions when retirement plans and IRAs purchase insurance and annuity contracts. Under PTE 2020-02, if an “investment professional” gives fiduciary advice to a retirement investor, the “financial institution” is also considered a fiduciary.
I can tell you right now- the chances of an insurance company signing up to become a co-fiduciary are about nil.
I’m just wondering how long we’ll have to wait after the final rule is published before the lawsuits are filed. -sjm
