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Advisers can’t be passive when it comes to DOL rule’s fiduciary principles

November 18, 2016

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All professional advisers have a common mandate — to serve clients' best interests. This is a defining characteristic of what it means to be a professional in the classic sense of the word.

With the advent of the best-interest contract exemption, or BICE, created by the Labor Department's conflict of interest rule, the specific meaning of a “best interest” obligation takes on heightened significance for retirement advisers.

Under BICE, advisers who receive non-level (conflicted) compensation must formally commit to serving investors' best interests. BICE creates an enforceable contractual obligation between the client and the adviser's firm with specific requirements designed to demonstrate that the adviser's commitment is backed by concrete actions.

There is a dichotomy between the principles-based fiduciary standard underpinning the professional's best-interest mandate and the rules-based requirements established under BICE. Read More.

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