More On Legal & Compliance
from The Advisor's Professional Library- How to Avoid Sabotaging Your Compliance Exam There is much more to compliance examination survival than knowing all of the rules. It helps to understand why the rules were put in place—and to recognize that examiners are not the enemy.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIA’s failure to stay within the scope of the Section 28(e) safe harbor may violate the advisor’s fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients’ transactions.
As the deadline to comply with the Department of Labor’s (DOL) fee disclosure rules 408(b)2 and 404(a) draws closer, The Principal Financial Group announced Tuesday that it has created an online resource called Assessing Retirement Plan Value to help advisors help clients become educated about plan fees.
“There is more to assessing retirement plan fees than comparing numbers. The better informed plan sponsors are about the services received for those fees, the better equipped they are to make an effective evaluation,” said Greg Burrows, senior vice president of retirement and investor services at The Principal, in a statement. “Financial professionals can use our new online resource to help clients evaluate the overall value of the services the plan is receiving and then assess the reasonableness of the fees paid for those services.”
The Principal says the online resource offers:
- An explanation of retirement plan costs
- Tips on how to review plan services
- Help navigating cost considerations
- Tips for evaluating fee reasonableness
- Tips for addressing participant questions
The online site also offers a Fee Reasonableness Review Checklist, a sample template financial professionals can share with plan fiduciaries to help guide them through the evaluation process.
The compliance date for the final rule on 401(k) fee disclosures, rule 408(b)(2), is July 1.
“We’ve been delivering the required enhanced disclosures to plan sponsors since last year,” said Burrows. “We wanted to get ahead of the deadlines so there would be no surprises for financial professionals and plan sponsor clients. This new online hub is one more step in ensuring that plan sponsors understand their plan costs and have what they need to fulfill their fiduciary obligations.”
The Principal also created an ERISA 404(a) Participant Disclosure Regulation Resource Center to assist plan sponsors in complying with the new participant disclosure regulation.
