In October 2010, the Department of Labor (DOL) proposed a redefinition of fiduciary under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code. Many provisions of the regulation do not correspond to existing laws, including the Investment Advisers Act of 1940. They are also inconsistent with the efforts by the Securities and Exchange Commission to establish a uniform fiduciary standard, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Passage of the regulation would have a far-reaching, negative impact on the industry and investors. Overall, it could force broker-dealers and investment professionals to reconsider their respective retirement business models or increase fees to cover fiduciary risk, both of which would impose higher costs and complexity on investors and reduce the retirement plan choices available to them.

The Securities Industry and Financial Markets Association (SIFMA) has been at the forefront of efforts to persuade the DOL to withdraw its proposal. Its latest initiative mobilizes firms against the proposed amendment. Regardless of your affiliation with SIFMA, you can join the cause to protect your business and your clients. Visit capitolinterest.com, and click on Act Now on Fiduciary to personalize a letter or e-mail to your legislator. For an overview on the issue, please click here.

For the latest news and more information on SIFMA’s response to the proposed regulation, visit the Fiduciary Standard section of sifma.org.