DOL Fiduciary Duty Rule

The Department of Labor (DOL) Fiduciary Rule (the “Rule”) regulatory package was released on April 6, 2016, following a comment period and public hearings. It has withstood several legal challenges, a change in administration following the November 2016 presidential election and a brief delay, becoming applicable on June 9, 2017. Additionally, an 18-month delay on requirements to comply with the remaining provisions in the Rule was approved by OMB on August 29, 2017, extending the applicability date from January 1, 2018 to July 1, 2019.

In addition, the SEC issued a request for public comments on standards of conduct for investment advisors and broker-dealers to cover non-retirement accounts given the mandate for a federal uniform fiduciary standard under the Dodd-Frank Act, and some state regulators (e.g., Nevada) have also enacted similar regulation.

The DOL Fiduciary Rule significantly expands the definition of investment advice as it relates to employee benefit plans and individual retirement accounts, expanding the universe of individuals and firms who will be considered fiduciaries subject to the stringent fiduciary standards of ERISA and the Internal Revenue Code. Because a fiduciary is required to act in the “best interest” of the investor, firms have been working to revise their business models to demonstrate that the advice they provide to retirement investors is in investors’ best interest.

With ~50% of US retail financial assets in retirement accounts, the DOL Fiduciary Rule has driven significant changes to product, pricing, compensation, compliance regimes, technology and operations practices at US wealth managers, asset managers, retirement platform providers and annuities manufacturers and distributors.

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7 Day Yield - Fate of the DOL Fiduciary Rule, plus impact investing

PwC's Arjun Saxena provides an update on the DOL Fiduciary Rule. Plus, PwC's Don Reed explains why impact investing is on the rise. Dr. Alexis Crow appears as our guest and shares other examples of where we're seeing a rollback in regulations.

 

How PwC can help

PwC is the industry leader for DOL Fiduciary Rule strategy and implementation and has helped a significant number of institutions develop and implement solutions to address their DOL challenges. We have a dedicated DOL practice composed of industry experts that are at the forefront of thought leadership, are familiar with the DOL’s perspective, and monitor how industry participants are developing solutions for the Rule.

Services we offer

Overall

  • Robust rule response strategy development

  • In-depth industry knowledge and insights on Rule implementation best practices

  • Dedicated DOL practice and engagement teams with significant expertise in wealth management industry and DOL Rule

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Impact assessment

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  • In-depth economic impact analysis, including revenue, cost and money-in-motion impacts

  • Highly efficient baseline analysis and business/operations impact evaluation, including business strategy, products, services, clients, associates, operations and technology roadmap to implement the target operating models and business and technical requirements

     

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Best Interest Contract (BIC) Exemption and other exemptions

  • Customized strategic decision making framework

  • Focused executive workshops and working groups for decision making on use of BIC exemption and / or other exemptions

  • Target operating model design for contract delivery, disclosure delivery, dialogue model, supervision model, etc

  • Process optimization that may create synergies and benefit other businesses or processes

  • Business and technical requirements development

  • Effective support throughout the technology conflicts of interest

  • Neutral factor framework to address differential compensation

  • Design and implementation of new product pricing, FA compensation and firm compensation strategies

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Product rationalization

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  • Identification of high risk areas with regard to the Rule context

  • Strategies for new product development and / or new share classes development

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Pricing and compensation

Re-evaluation of pricing and compensation strategies and mechanisms to address

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Program and project management

  • Significant program governance and oversight support

  • Executive reporting and communication delivery

  • Outstanding project management expertise

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Contact us

Arjun Saxena
Principal, Financial Services Advisory, Asset & Wealth Management
Tel: +1 (212) 551 6411
Email

Dan Ryan
US Banking and Capital Markets Leader
Tel: +1 (646) 471 8488
Email

Michael Spellacy
Global Wealth Management Leader
Tel: +1 (646) 471 2076
Email

Julien Courbe
Financial Services Advisory Leader
Tel: +1 (646) 471 4771
Email

Chris Joline
Principal, Financial Services Advisory, Insurance
Tel: +1 (646) 471 5659
Email

Lisa Herrnson
Managing Director, ERISA Advisory
Tel: +1 (646) 471 8227
Email

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