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May 11, 2016

The DOL’s New Fiduciary Rule: The Thin Line Between Education and Advice

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Following the release in 2015 of the US Department of Labor’s proposed fiduciary rule, many commentators feared that communications that had previously been characterized as “investment education” would now constitute “investment advice,” thereby giving rise to fiduciary status and potential liability under ERISA. The DOL incorporated into the final rule, almost without change, an Interpretative Bulletin issued by the DOL in 1996 (“IB 96-1”), which drew a thin line between advice and education in four areas: (1) plan information, (2) general financial and investment information, (3) asset allocation models, and (4) interactive investment materials. The incorporation of the principles of IB 96-1 into the final rule is helpful but limited, as the final rule leaves a number of interactions between financial institutions and retail retirement clients in a gray zone, particularly when it comes to information provided on web sites and call centers where specific funds or investment products may be mentioned by name. This publication provides a description of non-fiduciary education under the final rule.

View full memo, The DOL’s New Fiduciary Rule: The Thin Line Between Education and Advice

Authors and Contributors

John J. Cannon III

Partner

Compensation, Governance & ERISA

+1 212 848 8159

+1 212 848 8159

New York

Nathan Greene

Partner

Investment Funds

+1 212 848 4668

+1 212 848 4668

New York

Adam Hakki

Partner

Litigation

+1 212 848 4924

+1 212 848 4924

New York

Kenneth J. Laverriere

Partner

Compensation, Governance & ERISA

+1 212 848 8172

+1 212 848 8172

New York

Doreen E. Lilienfeld

Partner

Compensation, Governance & ERISA

+1 212 848 7171

+1 212 848 7171

+1 650 838 3804

+1 650 838 3804

New York

Thomas Majewski

Counsel

Investment Funds

+1 212 848 7182

+1 212 848 7182

New York

Brian H. Polovoy

Partner

Litigation

+1 212 848 4703

+1 212 848 4703

New York

Linda Rappaport

Of Counsel

Compensation, Governance & ERISA

+1 212 848 7004

+1 212 848 7004

New York

Russell Sacks

Partner

Financial Institutions Advisory & Financial Regulatory

+1 212 848 7585

+1 212 848 7585

New York

Paul Schreiber

Of Counsel

Investment Funds

+1 212 848 8920

+1 212 848 8920

New York