Retirement Security Rule Solution

The Retirement Security Rule redefines fiduciary responsibilities, setting higher standards for investment advice.

The Retirement Security Rule and RightBRIDGE

RightBRIDGE as a Retirement Security Rule Compliance Tool

RightBRIDGE is a regulatory compliance technology solution that systematizes multiple best-interest regulations at the federal and state level. This includes recent Department of Labor regulations around fiduciary compensation exemption. In a recent opinion published by the Wagner Law Group Stephen Wilkes discusses RightBRIDGE as a viable tool for compliance with the updated PTE 2020-02. A full version of the opinion can be requested here.

“… we have reviewed the proposed Retirement Security Rule with an eye towards any changes that might impact the issues addressed in our opinion letters of July 13, 2021 and March 18, 2022. Of course, the proposed Retirement Security Rule and the proposed changes to PTE 2020-02 are just that – proposed – and their requirements may change in their final form. We believe that the RightBRIDGE approach is wholly consistent with the Proposed PTE in its current form and will continue to be an important asset for those who rely on RightBRIDGE as they seek to comply with PTE 2020-02 as it exists today and under proposed Retirement Security Rule in the future.”

Retirement Security Rule Changes the Definition of Fiduciary

Under the new Retirement Security Rule the definition of a fiduciary has been changed. As a fiduciary, a financial financial professional must adhere to one of several existing exemptions (PTE 2020-02, PTE 84-24) and the associated requirements in order to receive compensation. Many financial professionals and their associated financial institutions now find themselves subject to the expanded fiduciary definition. RightBRIDGE is here to help.

New Definition

The Department has updated criteria for defining a financial services provider as an investment advice fiduciary under federal pension law. This designation applies if the provider:

  1. Makes an investment recommendation to a retirement investor
  2. Is provided for a fee or other compensation, such as commissions
  3. Holds itself out as a trusted adviser by
    • specifically stating that it is acting as a fiduciary under Title I or II of ERISA
    • making the recommendation in a way that would indicate to a reasonable investor that it is acting as a trusted adviser making individualized recommendations based on the investor’s best interest.

RightBRIDGE Users on Getting Feedback from Regulators on Systemization