The Fiduciary Trend: The Combined Effects of the Proposed Advice Regulation and 408(b)(2)

Fred Reish, ERISA attorney from the Reish & Reicher law firm

March 03, 2011

A discussion of the DOL's new proposed regulation on fiduciary investment advice and the DOL's 408(b)(2) regulation. The proposal will, if adopted in its current form, substantially expand the definition of fiduciary investment advice to include many of the current activities of investment consultants and broker-dealers. The 408(b)(2) regulation amplifies that issue by requiring a written disclosure if a person or entity "reasonably expects" to be providing fiduciary services. In addition, both the SEC staff and FINRA have suggested the possibility of a more limited fiduciary status under the securities laws for broker-dealers. What are the trends? What are the specific ERISA provisions? What are the consequences?