In a 2-to-1 decision, the 5th Circuit Court of Appeals reversed a lower court 2016 decision that upheld the Department of Labor’s (DOLs) fiduciary rule. The rule extended the fiduciary definition defined in the Employee Retirement Income Security Act (ERISA) that applies to the retirement plan market to IRAs in the retail market, often sold by securities brokers and insurance agents.
The DOL, which had already delayed implementation of significant portions of the rule, announced it would not enforce the rule’s provision as a result of the court’s decision. However, there is a great deal of uncertainty for some in the financial services and insurance industries, as many companies had already implemented new policies and procedures in response to the new fiduciary rule.
“Our investment advisers were acknowledging their fiduciary duties before the new rules were announced and will continue to do so whether or not those rules ever go into effect,” said Vice President of Compliance for Bukaty Financial Services, Phil Troyer, JD.