150,000+ ESSAYS

Find more results for this search now!

Need a Brand New Custom Essay Now?  click here

Fiduciary Rule

Uploaded by CaseyP on Apr 18, 2017

Student’s Name
Instructor’s Name
Course Title
Fiduciary role
History of the Fiduciary Rule
For many years, the regulation of the quality of financial advice offered to retirees has been under the provisions of The Employee Retirement Income Security Act of 1974 commonly known as ERISA. Since 1974, no revisions have been made on ERISA to reflect the changes in the retirement saving trends such as the surge in the Individual Retirement Accounts (IRAs). Additionally, since the enactment of the ERISA, the financial sector has experienced a rapid growth in the defined contribution plans. According to Pasztor, “40 years have elapsed since the Department of Labor’s defined what comprise a fiduciary act when it comes to the provision of advice that involves retirement plans (9). In 2010, several recommendations were proposed but were quickly abandoned following a fierce opposition from the different stakeholders in the financial industry (Skinner).
On February 23, 2015, President Obama authorized the Department of Labor to update the rules guiding the advice that the financial service providers give to retirees. According to President Obama, the new rules aimed at ensuring that the financial advisors put their client’s best interest above their own (Skinner). On April 2016, the Department of Labor proposed new rules as per Presidents Obama’s directive. The new recommendations were approved by the Office of Management and Budget and endorsed by President Obama (Pasztor 2). The Department of Labor issued its final set of rules on April 6, 2016. However, this was not until it held public consultation that lasted for four days. Under the Department of labor’s new definition of fiduciary demands, all financial advisors need to act in the best interest of their clients. For this reason, there is no way a financial advisor can conceal any potential conflict of interest. Additionally, the advisors are mandated to disclose all the commissions and fee their charge for their services to the client in terms of dollars. The rule issued by the Department of Labor is set to be implemented starting on April 10, 2017 (Pasztor). If implemented, the new rule will ethically and legally bind all the professionals who offer financial advice to retirees since they can be held personally liable if their actions contradict with their client’s best interest (Skinner).
The ruling will not only affect the financial advisors but will also have tremendous consequences on the insurance agents and brokers as well....

Sign In Now to Read Entire Essay

Not a Member?   Create Your FREE Account »

Comments / Reviews

read full essay >>

Already a Member?   Login Now >

This essay and THOUSANDS of
other essays are FREE at eCheat.

Uploaded by:   CaseyP

Date:   04/18/2017

Category:   Law

Length:   17 pages (3,720 words)

Views:   427

Report this Essay Save Essay
Professionally written essays on this topic:

Fiduciary Rule

View more professionally written essays on this topic »