{"id":987,"date":"2015-04-22T09:29:33","date_gmt":"2015-04-22T13:29:33","guid":{"rendered":"http:\/\/events.lindabury.com\/?p=987"},"modified":"2019-12-24T13:21:01","modified_gmt":"2019-12-24T18:21:01","slug":"proposed-regulation-subjects-financial-advisers-to-fiduciary-duties-under-erisa-and-tax-code","status":"publish","type":"post","link":"https:\/\/www.lindabury.com\/firm\/insights\/proposed-regulation-subjects-financial-advisers-to-fiduciary-duties-under-erisa-and-tax-code.html","title":{"rendered":"Proposed Regulation Subjects Financial Advisers to Fiduciary Duties Under ERISA and Tax Code"},"content":{"rendered":"<p>On April 14, 2015, the Department of Labor, Employee Benefits Security Administration (\u201cEBSA\u201d) released a proposed regulation defining who is a \u201cfiduciary\u201d of an <a href=\"https:\/\/www.lindabury.com\/employee-benefits.html\">employee benefit plan<\/a> under the Employee Retirement Income Security Act of 1974 (\u201cERISA\u201d) as a result of giving investment advice to a plan or its participants or beneficiaries. \u00a0If adopted, the new regulation would treat individuals who provide investment advice or recommendations to an employee benefit plan, plan fiduciary, plan participant or beneficiary, IRA, or IRA owners as fiduciaries under ERISA and the Internal Revenue Code (the \u201cTax Code\u201d). The proposed rule seeks to increase consumer protection for plan sponsors, participants, beneficiaries and IRA owners by naming financial advisers and their firms as fiduciaries, thus compelling such advisers to abide by certain duties of good faith and loyalty to their clients, subject to specific carve-outs and exceptions.<\/p>\n<p>Under the current statutory and regulatory scheme, fiduciary status is central to protecting the integrity of retirement and other important tax-favored benefits. \u00a0Generally, a person is a fiduciary to a plan or IRA to the extent that the person engages in specified plan activities, including rendering investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of a plan. \u00a0ERISA imposes standards of care and undivided loyalty on plan fiduciaries and holds such fiduciaries liable when these duties are violated. \u00a0IRA and plan fiduciaries are not permitted to engage in \u201cprohibited transactions\u201d which stem from conflicts of interest and endanger the security of retirement, health and other benefit plans.<\/p>\n<p>EBSA\u2019s new proposal expressly expands these duties to financial advisers and their firms, by broadening the definition of fiduciary \u201cinvestment advice,\u201d subject to specific exceptions or carve-outs for particular kinds of communications that are non-fiduciary in nature. \u00a0Under the new definition, a person renders investment advice by:<\/p>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.lindabury.com\/firm\/insights\/proposed-regulation-subjects-financial-advisers-to-fiduciary-duties-under-erisa-and-tax-code.html\"  title=\"Continue Reading Proposed Regulation Subjects Financial Advisers to Fiduciary Duties Under ERISA and Tax Code\" class=\"more-link\">Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>On April 14, 2015, the Department of Labor, Employee Benefits Security Administration (\u201cEBSA\u201d) released a proposed regulation defining who is a \u201cfiduciary\u201d of an employee benefit plan under the Employee Retirement Income Security Act of 1974 (\u201cERISA\u201d) as a result of giving investment advice to a plan or its participants or beneficiaries. \u00a0If adopted, the [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[65,247,248,343],"tags":[],"coauthors":[214],"class_list":["post-987","post","type-post","status-publish","format-standard","hentry","category-insights","category-labor-employment-insights","category-litigation-insights","category-wills-trusts-estates-insights"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Proposed Regulation Subjects Financial Advisers to Fiduciary Duties Under ERISA and Tax Code &#8212; April 22, 2015 &#8212; Lindabury, McCormick, Estabrook &amp; Cooper, P.C. 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Firm News &amp; Events","og_description":"On April 14, 2015, the Department of Labor, Employee Benefits Security Administration (\u201cEBSA\u201d) released a proposed regulation defining who is a","og_url":"https:\/\/www.lindabury.com\/firm\/insights\/proposed-regulation-subjects-financial-advisers-to-fiduciary-duties-under-erisa-and-tax-code.html","og_site_name":"Lindabury, McCormick, Estabrook &amp; Cooper, P.C. Firm News &amp; Events","article_published_time":"2015-04-22T13:29:33+00:00","article_modified_time":"2019-12-24T18:21:01+00:00","author":"Sergio D. Sim\u00f5es","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Sergio D. 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