RIGHTBRIDGE FOR REGULATION
Retirement Security Rule
The Retirement Security Rule seeks to redefine fiduciary responsibilities, setting higher standards for investment advice.
The Retirement Security Rule and RightBRIDGE
RightBRIDGE as a Retirement Security Rule Compliance Tool
While RightBRIDGE has many benefits in saving users time and effort, it also enables users to adhere to a number of federal regulations as well and operates as an important compliance tool. In a recent opinion published by the Wagner Law Group Stephen Wilkes discusses RightBRIDGE as a viable tool for compliance with the Retirement Security Rule. 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 would be changed. As a fiduciary financial professionals must adhere to one of several existing exemptions (PTE 2020-02, PTE 84-24) and the associated requirements in order to receive compensation. If a financial professional, under the new test, determines that they are a fiduciary RightBRIDGE can help.
New Proposed Definition
The Department is proposing criteria for defining a financial services provider as an investment advice fiduciary under federal pension law. This designation would apply if the provider:
- Offers investment advice or recommendations to a retirement investor.
- Receives compensation, directly or indirectly, for providing this advice.
- Engages in a professional relationship where the investor expects sound investment recommendations in their best interest. The provider would be considered a fiduciary if:
- They have discretion over the investor’s investments.
- They regularly provide investment recommendations as part of their business, tailored to the investor’s needs and circumstances, and intended to be relied upon by the investor for their best interests.
- They explicitly declare themselves as acting in a fiduciary capacity when making investment recommendations.
