Brief Description of the DOL Rule
The U.S. Department of Labor has established a Fiduciary Duty Rule governing investment activity within retirement accounts. This rule sets out the specific responsibilities that investment professionals have to abide by to assure they put their retirement customers’ interests ahead of their own.
Beginning on 6-9- 2017, advisers must give advice that is in the best interest of the retirement investor. There are two components to the best interest standard- prudence and loyalty.
The Prudence Standard states that the adviser must meet a professional standard of care as specified in the text of the rule.
The Loyalty Standard states that the advice given must be based on the interest of the customer rather than the competing financial interest of the adviser or firm.
The DOL Rule also directs firms to ensure that compensation charged to retirement customers is reasonable, that no misleading statements are made to customers and that all conflicts of interest are fully disclosed.
How the DOL Rule impacts CSCM Retirement Account Customers
The Rule should provide CSCM customers with additional comfort knowing that their retirement account is being handled with the highest standards of fiduciary responsibility as determined by the DOL.
CSCM’s Plan to Comply with the DOL Fiduciary Rule
The DOL Fiduciary Rule has additional requirements that are being phased in with a full implementation date set at 1-1-2018. The Rule is also being reviewed by the new administration at the DOL and may be modified before the end of 2017. CSCM will endeavor to fully comply with the DOL Regulation with a focus to preserve the safety and soundness of our investment transactions with our clients.