The independent financial services community is hearing a lot more about the Department of Labor (DOL) in recent years and seeing more regulatory and investigative activity from them. In FSI’s November webinar, “DOL Activity: Proposed Regulations, Investigations and Evaluations of Broker-Dealers,” Fred Reish of Drinker Biddle and Reath, LLP provided a look at what broker-dealers can expect to see from DOL in the coming months and how they can prepare.
The webinar, co-sponsored by FSI’s Compliance and Operations & Technology Councils, highlighted actions expected to be taken by the DOL in the next year. Reish noted this is the “most activist” DOL he has seen during his years in the ERISA field. He noted that similar trends are occurring at the SEC and FINRA due to the aging of the Baby Boomer generation and as the first 401(k) generation prepares to enter retirement.
Reish described three key areas he anticipates DOL to take action including:
- 408(b)(2) disclosures – DOL has concerns about the adequacy of the 408(b)(2) disclosures from some B-Ds and service providers. Investigations of 408(b)(2) disclosures will start in earnest in 2014 and B-Ds should be prepared.
- Retirement income projections – Reish predicts regulatory mandates will be proposed for participant directed plans to provide participants with retirement income projections on their quarterly statements.
- Definition of fiduciary – DOL is currently working on the re-proposal of its definition of fiduciary. Reish anticipates we will see the re-proposal released early next year.