Fiduciary Duties

Excessive fee suits continue to be brought against small(er) plans

As described in a recent planadviser article, ERISA fee litigation against plans on the smaller side continue. One suit was brought against a plan with only $9 million in assets. Plan sponsors and committees continue to operate in a high risk ERISA environment.

SEC alleges breach of fiduciary duty over undisclosed conflicts of interest

CFP Board said to take action in response to critical WSJ analysis

Live Blogging: IA Interpretive Release – rollovers/low cost products

Sarah mentions that the fiduciary duty applies to advice re. rollovers and to prospective clients. In terms of satisfying the fiduciary standard of care, merely selecting the lowest cost product is not sufficient. With respect to the duty of loyalty, informed consent can be explicit or implicit and need not be in writing. However, such conflicts may be of such a nature that full and fair disclosure may not be enough.

Live Blogging: IA Interpretive Release – effective date

Sarah notes that the IA interpretive guidance applies now, and so firms can/should begin thinking about compliance presently for purposes of enforcement.

Live Blogging: Investment Adviser (IA) Interpretive Release

Sara Crovitz is now discussing the Investment Adviser Interpretive Release. She notes the IA release applies to all clients, both retail and institutional. The scope of the fiduciary relationship can be shaped by the agreement between the customer and adviser. She mentions that the adviser could not waive its fiduciary duties, regardless of sophistication of the customer.

Live Blogging – SEC standards of conduct rulemaking

Three members of Stradley’s Fiduciary Governance Group are currently presenting on the SEC’s significant rulemaking re. broker-dealer and investment adviser standards of conduct. Larry Stadulis is the first to speak and tackles Reg BI. The policy objectives of Reg BI are:

  • designed to improve consumer protection, particularly against conflicts of interest;
  • designed to help retail investors to better understand and compare investment options and clarity over standards of conduct.

Larry notes that Reg BI does not impose “full blown fiduciary status” on broker-dealers and that there is not a uniform fiduciary standard for investment advisers and broker-dealers.

Alan Goldberg & Larry Stadulis quoted in AdvisorNews re. implementing the SEC’s standards of conduct package

CFP Board delays implementation of fiduciary standard

Blass and Peirce contrast broker-dealer and investment adviser standards