RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of March 11, 2017

Posted by RIA in a Box

Mar 17, 2017 12:40:56 PM

IAA DOL fiduciary rule delay and 3rd party audits

Each week we’re giving you our weekly report highlighting the top compliance news articles from various industry news publications. We have selected the most relevant and important news articles related to registered investment adviser ("RIA") compliance and regulatory issues. This week's recap focuses on the current status of the Department of Labor ("DOL") fiduciary rule. Check back each week for the latest list of top stories.

Here's our top investment adviser compliance articles for the week of March 11, 2017:

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  1. DOL Announces "Temporary Enforcement Policy" in Field Assistance Bulletin (Author- Jason C. Roberts, Esq., AIFA, LinkedIn)

The DOL issues Field Assistance Bulletins ("FAB") in order to clarify questions the industry sometimes has in relation to field operations as well as "transition enforcement relief that permits employers, plan officials, service providers and others time to respond to new laws and regulations." Jason C. Roberts, Chief Executive Officer of Pension Resource Institute, reports in his article that on Friday March 10th, the DOL's Director of Regulations and Interpretations published FAB 2017-01. The subject of the FAB is "Temporary Enforcement Policy On Fiduciary Duty Rule." Roberts explains, "the DOL's 'Temporary Enforcement Policy' would allow it time to process the comments and issue a final rule 30 days in advance of its effective date without bypassing the Administrative Procedure Act's ("APA") standard requirements leaving the DOL less susceptible to attack in the courts." In addition, the FAB addresses enforcement policy in regards to whether the rule is or isn't delayed and provides more clarity to impacted firms. 

  1. The Department of Labor's Fiduciary Rule: Where Are We Now? (Author- Fred Reish, Investment News)

Fred Reish writes in this Investment News article, "the Trump administration has issued a proposed regulation to delay the applicability date of the DOL fiduciary rule." Reish notes that the rule's likely delay will be followed by an effort by the DOL to modify or kill the rule. With the uncertainty of the rule's future, Reish claims, "regardless of the outcome, we know one thing: The old fiduciary definition continues to apply to advice to retirement plans, participants and individual retirement account owners until a new rule is adopted." He goes into detail on the requirements needed for an adviser to be a fiduciary as well as example scenarios to consider under the current applicable rules.

  1. Emergency Request to Block DOL Fiduciary Rule Filed in Texas Court (Author- Melanie Waddell, Think Advisor)

Think Advisor's Melanie Waddell reports, "The U.S. Chamber of Commerce and industry groups suing the Labor Department over its fiduciary rule in a Texas court filed an emergency request Friday asking a judge to stop the rule from taking effect while they take their case to the U.S. Court of Appeals for the Fifth Circuit." The National Association for Fixed Annuities ("NAPFA") is also appealing a federal court's denial of their bid to block the rule. The appeal was also filed on the same day that the DOL issued its FAB helping to address short term enforcement concerns. 

  1. Lobbyists Head to White House on Investment Adviser Rule (Author- Megan R. Wilson, The Hill)

In this slightly dated, but still relevant piece, Megan R. Wilson, reporter for The Hill writes, "lobbyists met with White House officials this week to discuss the fate of a controversial investment adviser rule that President Trump targeted for review." Maureen Thompson and William Nelson, two representatives from the Certified Financial Planner Board of Standards ("CFP"), believe a delay of the DOL fiduciary rule would be harmful. Both supporters and those opposed to the rule are hoping to have their opinions heard in hopes they will receive the outcome they desire. 

  1. C Corp, S Corp or LLC for Breakaway Brokers? Each Has Tax Implications (Author- Bernice Napach, Think Advisor)

When a broker decides to breakaway and start their own firm, one important decision is selecting the proper business entity structure. The entity structure can have significant future tax implications. Bernice Napach, Think Advisor Senior Writer, writes, "an LLC or S corp, are both pass-through entities whose earnings are not taxed at the firm level but as the income of the owner." Another option is to be a "C corp, a standard corporation that is itself taxed separately from its owners." Napach reveals key benefits as well as some disadvantages related to each business structure type.

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Don't forget to check out last week's top RIA compliance news articles on the DOL fiduciary rule and potential Dodd-Frank rule-making. Be sure to check back next Friday for next week’s top articles! 

Lexington Compliance and RIA in a Box LLC are not law firms, investment advisory firms, or CPA firms. Lexington Compliance and RIA in a Box LLC do not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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